US inflation climbed to 8.2% in September, a greater increase than anticipated, as stubbornly high rent and food prices appear set to secure another significant Federal Reserve interest rate hike next month.
A carefully watched indicator of the cost of goods and services, the Labor Department’s Consumer Price Index for September showed a higher-than-anticipated 0.4% rise from August.
Consumer prices increased 8.2% in the 12 months prior to September, dropping for a third consecutive month but still rising more than anticipated in a concerning indication for the broader economy as the danger of persistent inflation threatens future rate hikes, sinking segments of the market.
Core inflation, which does not include the erratic costs of food and gasoline, increased to 6.6% in September from 6.3% in August. Since August 1982, the annual core rise has been at its highest level. Core price growth for the month was 0.6%.
According to Dow Jones statistics, experts anticipated the September CPI report to show a monthly increase of 0.3%, up from 0.1% in August. Consumer prices were expected to rise 8.1% annually, down from 8.3% in August.
In September, US households’ biggest cause of financial stress came from rising food prices. In comparison to the same month last year, the food index rose 11.2%, or 0.8%, throughout that period.
According to the Bureau of Labor Statistics, the shelter index, which includes rent, increased by 6.6% and was responsible for more than 40% of the rise in core inflation. Since June 1990, the owners’ equivalent rent index experienced its biggest monthly gain.
A significant set of data will be taken into account by the Fed when it meets again on November 1 and 2, including the September CPI report. Days before, a strong September jobs data confirmed the Fed was likely to keep its aggressive policy position.
According to Mark Hamrick, senior economic analyst at Bankrate, the CPI’s year-over-year measure “is likely to continue elevated through the end of the year.”
