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U.S. Inflation: Soaring prices rival 13-year highs as car, food and gas costs skyrocket

Washington-Another rise in consumer prices in September boosted inflation by 5.4% from a year ago. This is comparable to the largest rise since 2008, as intertwined global supply lines continue to cause havoc.

Consumer prices in the United States rose 0.4% from August to September as all costs of new cars, food, gas and restaurant meals soared.

The annual rise in the consumer price index was consistent with June and July measurements, the highest in 13 years. Ministry of Labor said on Wednesday.. Excluding the volatile food and energy category, core inflation rose 0.2% in September, up 4% compared to a year ago. Core prices reached a 30-year high of 4.5% in June.

Continuous price increases Federal ReserveOfficials have repeatedly stated that the increase is temporary, and President Joe Biden is facing an economy of slowing employment growth and rising inflation. Biden has been accused by the Republicans of spurring inflation with a $ 1.9 trillion bailout package enacted in March this year.

This year’s unexpected surge in inflation reflects the surge in prices for furniture, cars, televisions and other primarily imported commodities, as well as food and energy. COVID-19 has closed factories in Asia, delayed US port operations, anchored container ships at sea, and consumers and businesses are paying more for goods that may not arrive for months.

Cathy Bossjanchich, an economist at consulting firm Oxford Economics, said, “Price increases due to ongoing supply chain bottlenecks in strong demand will only gradually resolve the imbalance between supply and demand. Inflation will continue to rise. ” “We share the Fed’s view that this is not the beginning of a rising wage spiral, but we expect inflation to continue to exceed 3% until mid-2022,” he said.

With the latest inflation data, the Fed is even more likely to start cutting $ 120 billion a month in bond purchases aimed at keeping long-term interest rates low. Most analysts expect the Fed to announce such a move at its next meeting on November 3.

Higher prices also outweigh the wage benefits that many workers can get from companies that have to pay more to attract employees. Average hourly wages in September rose 4.6% year-on-year, a healthy rise, but not enough to keep up with inflation.

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But for older Americans, the increase is Maximum profit increase in 39 years.. The government announced on Wednesday that monthly social security checks would rise by 5.9% next year. There are other benefits for veterans and retirees as well.

One of the good signs of September is that prices have fallen or eased in categories that were initially pushed much higher by the pandemic. These declines did not exacerbate the rise in core prices.

Used car prices fell 0.7% last month. It fell for the second year in a row after a surge in costs in the summer as consumers couldn’t find or buy a new car and instead turned to a used car.

Hotel room, car rental and airline ticket costs all fell last month as Delta Spike in COVID-19 cases restricted travel plans. Rent-a-car prices soared in the summer after many companies sold some of their rental cars. Clothing prices fell 1.1% in September, giving consumers some reassurance after rising earlier this year.

However, new cars are becoming more and more expensive, with September costs up 1.3%, up 8.7% compared to a year ago. This is the largest 12-month rise in new car prices since 1980. The shortage of semiconductors curtailed car production and reduced the number of cars remaining in dealer lots.

Household furniture prices, which faced significant shipping delays, rose 2.4% in September alone, the largest rise since 1988. In the last 12 months, furniture costs have risen 11.2%, the highest since 1951.

The cost of shoes rose 0.5% in September and 6.5% over the past year. Children’s shoes have increased by 11.9%, a record increase in data dating back to the 1950s. Most shoes are imported and may be in a supply bottleneck.

Restaurant owners pay high salaries to seduce pandemic and elusive workers, and they pay more for food. And for the fifth straight month, it led to a significant price increase of 0.5% in September. The cost of eating in a full-service restaurant has risen 5.2% over the past year. This is an unprecedented leap as long as records are kept.

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Gas prices rose 1.2% last month, jumping more than 42% compared to a year ago. Electricity prices in September rose 0.8% from August.

Housing costs have also risen significantly as builders say they can’t find all the parts and workers needed to build a new home as quickly as they want. Rents rose 0.5% in September and home price indicators rose 0.4%. These two indicators make up almost one-third of the CPI, so if these rises persist, there will be significant upward pressure on prices.

Inflation is well above the Fed’s target of 2% per year. Jerome Powell reiterated that next year’s inflation should “weaken” and bring inflation closer to its target.

In a statement on Tuesday, Fed Vice-Chair Richard Clarida reiterated that view.

“This year’s inflation surge will be largely temporary once these relative price adjustments are completed and the bottlenecks are resolved,” he said.

President Raphael Bostic of the Atlanta Federal Reserve joked Tuesday in another statement that “temporary” was considered the equivalent of a curse in the Atlanta Federation. Bostic said the price surge was primarily a reflection of the pandemic’s impact on the supply chain and should eventually decline, but more than many Fed officials initially expected. It is likely to take time.

The White House said on Wednesday It helped promote an agreement to keep the Port of Los Angeles open 24 hours a day, 7 days a week to ease supply bottlenecks and reduce price pressures.

According to the Southern California Marine Exchange, the ports of Los Angeles and Long Beach, California account for 40% of all shipping containers entering the United States. As of Monday, 62 vessels were moored at the two ports, 81 waiting for docking and unloading. ..


AP writer Josh Boak contributed to this story.

Copyright © 2021 By AP communication. all rights reserved.

U.S. Inflation: Soaring prices rival 13-year highs as car, food and gas costs skyrocket

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