Inflation in the United States increased in September as a result of rising food and rent prices.
According to government data released Wednesday, the US inflation spike is not finished, with food and rent costs rising in the world’s largest economy last month, reflecting the difficulties Washington policymakers face as they manage the country’s recovery from the pandemic.
The consumer price index (CPI) of the Labor Department grew 5.4 percent in September compared to the same month a year ago, seasonally adjusted. It increased to 0.4 percent in August, just above experts’ expectations.
According to the Labor Department, food and housing prices accounted for more than half of the overall increase, but the influence of growing global energy prices was also visible in the statistics, which some economists suggested could imply inflation is overstaying its welcome.
On Twitter, Grant Thornton’s Diane Swonk remarked, “The increase in shelter prices is important to watch as it could counteract some of the slowing in inflation that occurs once current supply chain problems are overcome.”
As firms resume from Covid-19 shutdowns in 2020 and supply chains struggle with shortages and delays, the United States has seen price rises all year.
President Joe Biden faces a battle from inflation, which his critics have exploited to claim that his spending plans are excessive.
It has also perplexed the Federal Reserve, which has hinted that it may start reducing monetary assistance by the end of the year but may take longer to hike its borrowing rate, despite fears that the central bank’s cheap money policies are causing prices to rise.
According to the report, inflation jumped 4% last month compared to the same month in 2020, excluding volatile food and energy prices. It was up 0.2 percent from August of last year.
Food increased by 0.9 percent, while the food at home category, which includes grocery, increased by 1.2 percent, driving overall inflation higher.
Shelter increased by 0.4 percent, the most since June 2006, according to Ian Shepherdson of Pantheon Macroeconomics.
“This could just be an overshoot after a couple of minor increases,” he said. “However, we can’t rule out the possibility that the fundamentals — quick house price increases, more aggressive landlord pricing, short inventory, and faster wage growth — are pushing up the trend.”
The figures reflected the impact of increased global oil prices, with the gasoline index up 1.2 percent from August and energy overall rising 1.3 percent.
Energy prices have risen by 24.8 percent in the last year. The Washington Newsday Brief News is a daily newspaper published in Washington, D.C.