Inflation in the US remains stubbornly high, the latest figures reveal. The Consumer Price Index (CPI) rose by 0.4% in September following a 0.1% rise in August, translating into an 8.2% increase in inflation over the last 12 months.
The CPI measures the change in prices paid by consumers for goods and services.
Inflation was down from 8.3% in August but remains higher than expected despite the Federal Reserve’s efforts to manage rising prices through interest rate rises. It’s the third month in a row that inflation has fallen, however a Reuters poll of economists had forecast it would drop to 8.1%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The maintained increase in inflation means the Fed is likely to continue raising interest rates as it attempts to get inflation back to its 2% target. The latest increase came in September, when it set rates to between 3% and 3.25% — the third consecutive increase of 0.75%.
US inflation driven by cost of food, shelter and medical care
Prices were mostly pushed up by increases in the cost of food, shelter and medical care. However, these were partly offset by a 4.9% decrease in the gasoline index. The energy index also fell 2.1%.
The food index rose 0.8% over the month, while the food at home index rose 0.7%. Prices were mostly driven by increases in the cost of fruit and vegetables, cereals and bakery products and the higher price of meats, poultry, fish and eggs.
The Federal Reserve, the US central bank, has already raised interest rates five times since March and analysts expect it to lift rates to between 4.75% and 5% by early next year.
States begin to issue stimulus cheques to help combat inflation
The Federal Reserve sent out stimulus cheques to all Americans throughout the pandemic to help with financial pressures, and now individual states are following suit as inflation erodes residents’ money.
California, Massachusetts and South Carolina are among those sending financial aid to their residents. In California, some residents will be eligible for stimulus cheque payments of up to $1,050.
-
UK wage growth hits a record highStubborn inflation fuels wage growth, hitting a 20-year record high. But unemployment jumps
-
UK inflation remains at 8.7% ‒ what it means for your money
Inflation was unmoved at 8.7% in the 12 months to May. What does this ‘sticky’ rate of inflation mean for your money?
-
VICE bankruptcy: how did it happen?
Was the VICE bankruptcy inevitable? We look into how the once multibillion-dollar came crashing down.
-
Would a food price cap actually work?
Analysis The government is discussing plans to cap the prices of essentials. But could this intervention do more harm than good?
-
What is Warren Buffett’s net wealth?
Features Warren Buffett is one of the world’s richest people. But how did he make his money?
-
What is Rihanna's net worth?
Features Rihanna became the youngest self-made billionaire in 2022. Here’s how she made her money.
-
UK inflation slides to 8.7% - what does it mean for your money?
News Inflation has dropped below 10% for the first time in months, but with food prices at a 45-year high, is this good news and what does it mean for your money?
-
What is Bill Gates's net worth?
Features Bill Gates is one of the world’s richest people, but how did he make his money?
