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Oct 14 - US inflation sees largest annual increase in 13 years



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 2 months ago '05        #1
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Oct 14 - US inflation sees largest annual increase in 13 years
 

 
US inflation sees largest annual increase in 13 years as prices of gas, cars, food surge

WASHINGTON -- Another jump in consumer prices in September sent inflation up 5.4% from where it was a year ago, matching the largest increase since 2008 as tangled global supply lines continue to create havoc.

U.S. consumer prices rose 0.4% in September from August as the costs of new cars, food, gas, and restaurant meals all jumped.

The annual increase in the consumer price index matched readings in June and July as the highest in 13 years, the Labor Department said Wednesday. Excluding the volatile food and energy categories, core inflation rose 0.2% in September and 4% compared with a year ago. Core prices hit a three-decade high of 4.5% in June.

The ongoing price gains raise pressure on the Federal Reserve, whose officials have repeatedly said the increases will be transitory, and on President Joe Biden, who is facing an economy of slowing job gains and higher inflation. Biden has been accused by Republicans for spurring inflation with his $1.9 trillion rescue package enacted in March of this year.

The unexpected burst of inflation this year reflects sharply higher prices for food and energy, but also for furniture, cars, televisions, and other largely imported goods. COVID-19 has shut down factories in Asia and slowed U.S. port operations, leaving container ships anchored at sea and consumers and businesses paying more for goods that may not arrive for months.

"Price increases stemming from ongoing supply chain bottlenecks amid strong demand will keep the rate of inflation elevated, as supply (and) demand imbalances are only gradually resolved," said Kathy Bostjancic, an economist at Oxford Economics, a consulting firm. "While we share the Fed's view that this isn't the start of an upward wage-price spiral, we look for inflation to remain persistently above 3% through mid-2022."

The latest inflationary data makes it even more likely that the Fed will soon begin reducing its $120 billion a month in bond purchases, which are intended to keep longer-term interest rates low. Most analysts expect the Fed to announce such a move at its next meeting Nov. 3.

Higher prices are also outstripping the pay gains many workers are able to obtain from businesses, which are having to pay more to attract employees. Average hourly wages rose 4.6% in September from a year earlier, a healthy increase, but not enough to keep up with inflation.


For elderly Americans, however, the increase has resulted in the biggest increase in benefits in 39 years. Monthly Social Security checks will rise 5.9% next year, the government said Wednesday. So will other benefits for veterans and retirees.

One good sign in September was that prices fell or moderated in categories that had been initially pushed much higher by the pandemic. Those declines kept core price increases from worsening.

Used car prices declined 0.7% last month, the second straight drop, after costs soared over the summer as consumers, unable to find or afford a new car, turned to used instead.

The costs for hotel rooms, car rentals, and airline tickets also all fell last month, as the delta spike in COVID-19 cases limited travel plans. Car rental prices had shot up over the summer after many companies sold portions of their rental fleets. Clothing prices fell 1.1% in September, providing consumers some relief after increases earlier this year.

New cars, however, are growing increasingly expensive with costs rising 1.3% in September, and 8.7% compared with a year ago. That is the biggest 12-month increase in new car prices since 1980. A shortage of semiconductors has restrained vehicle production and left fewer cars on dealer lots.

Prices for household furniture, which has faced major shipping delays, jumped 2.4% in September alone, the biggest increase since 1988. Over the past 12 months, furniture costs have soared 11.2%, the most since 1951.

The cost of shoes rose 0.5% in September and have jumped 6.5% in the past year. Children's shoes are up 11.9%, a record-high gain in data that stretches back to the 1950s. Most shoes are imported and are likely caught in supply bottlenecks.

Restaurant owners are paying higher salaries to lure workers who have become elusive in the pandemic and they're paying more for food. And for the fifth consecutive month, that has led to outsized price gains, 0.5%, in September. The cost of a meal at a full-service restaurant has jumped 5.2% in the past year, an unprecedented leap for as long as records have been kept.

Gas prices jumped 1.2% last month and have soared more than 42% compared with a year ago. Electricity prices rose 0.8% in September from August.

Housing costs also rose at a strong clip, as builders say they cannot find all the parts and workers they need to build new homes as quickly as they'd like. Rents rose 0.5% in September and a measure of home prices climbed 0.4%. If sustained, those increases will put significant upward pressure on prices, as those two measures account for nearly one-third of the CPI.

Inflation is far above the Fed's target of 2% annually. Chair Jerome Powell has repeatedly said that the price gains should "abate" next year, bringing inflation closer to the target.

Fed Vice Chair Richard Clarida echoed that view in remarks Tuesday.

"The unwelcome surge in inflation this year, once these relative price adjustments are complete and bottlenecks have unclogged, will in the end prove to be largely transitory," he said.

Raphael Bostic, president of the Atlanta Federal Reserve, joked Tuesday in separate remarks that "transitory" is now seen as the equivalent of a curse word at the Atlanta Fed. Bostic said that the price spikes mostly reflect the pandemic's impact on supply chains and added they should eventually fade, but it will likely take longer than many Fed officials initially expected.

The White House said Wednesday that it has helped foster an agreement to keep the Port of Los Angeles open 24 hours a day, seven days a week, in an effort to ease supply bottlenecks and reduce price pressures.

Ports in Los Angeles and Long Beach, California, account for 40% of all shipping containers entering the U.S. As of Monday, there were 62 ships berthed at the two ports and 81 waiting to dock and unload, according to the Marine Exchange of Southern California.


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77 comments
 

 2 months ago '10        #2
lltreyll 
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+4   

 1 month ago '04        #3
datboy|e 
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Biden’s America
+12   

 1 month ago '20        #4
Habeas Corpus  topics gone triple plat - Number 1 spot x5
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+12   

 1 month ago '16        #5
Homer Pimpson 
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$btc
+12   

 1 month ago '13        #6
Hayek  topics gone triple plat - Number 1 spot x4
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Inflation isn't an issue because we can always print more money - Alan Dumbass Greenspan
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 1 month ago '15        #7
naledgestate 
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 datboy|e said
Biden’s America
Last I remember that phaggot Trump k*lled our deficit with those stupid tax cuts.

Tax cuts with people out of work adds insult to injury when it comes to tax revenue
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 1 month ago '15        #8
naledgestate 
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By the end of Biden's term, Covid will be endemic and under control and the economy will be back on its feet just in time for the nation to elect another republican.

Never fails
+39   

 1 month ago '10        #9
sho 2010  topics gone triple plat - Number 1 spot x2
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 naledgestate said
By the end of Biden's term, Covid will be endemic and under control and the economy will be back on its feet just in time for the nation to elect another republican.

Never fails
And then you’ll wake up and go outside your tent in one of millions of tent cities because you’re in another depression.

 1 month ago '11        #10
SomeOnesoN  topics gone triple plat - Number 1 spot x2
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If wages kept up with inflation, minimum wage would be at $24/hr right now. The rich been profiting off us for decades.
+42   

 1 month ago '06        #11
Skateboard T  topics gone triple plat - Number 1 spot x6
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 sho 2010 said
And then you’ll wake up and go outside your tent in one of millions of tent cities because you’re in another depression.
Yup, that’s how it works, Democrats fix the economy then republicans ruin it for the next democrat.
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 1 month ago '04        #12
Chokeabiish 
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 SomeOnesoN said
If wages kept up with inflation, minimum wage would be at $24/hr right now. The rich been profiting off us for decades.
This is a fact. My employer actually keeps up with inflation and I've seen about 11 or 12 bucks in 13 years. If every employer did that it wouldn't be this difficult for so many people. Greedy motherfu*kas.
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Top 10 most slapped recently  1 month ago '17        #13
Ymmot  topics gone triple plat - Number 1 spot x5
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 naledgestate said
By the end of Biden's term, Covid will be endemic and under control and the economy will be back on its feet just in time for the nation to elect another republican.

Never fails
Basically, and we'll do this stupid cycle all over again.

 1 month ago '15        #14
Tully Blanchard 
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 naledgestate said
By the end of Biden's term, Covid will be endemic and under control and the economy will be back on its feet just in time for the nation to elect another republican.

Never fails


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 1 month ago '05        #15
bobbysteels18  topics gone triple plat - Number 1 spot x21 OP
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From Afghanistan to the economy the worst president ever. It's sad the guy who said he got the most votes in history has lost so much in 10 months. When he ran he said we need someone who can lead and fix the supply chain issues, and it's only getting worse.
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Top 10 most slapped recently  1 month ago '17        #16
Ymmot  topics gone triple plat - Number 1 spot x5
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 bobbysteels18 said
From Afghanistan to the economy the worst president ever. It's sad the guy who said he got the most votes in history has lost so much in 10 months. When he ran he said we need someone who can lead and fix the supply chain issues, and it's only getting worse.
Yeah but Biden looks like he'll fix a lot of trump's fu*k ups. Trump was pretty bad though.
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 1 month ago '18        #17
Sick Flair 
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Even my favorite cheap sushi spot went up…

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 1 month ago '16        #18
Itsjustmefools  topics gone triple plat - Number 1 spot x2
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 Skateboard T said
Yup, that’s how it works, Democrats fix the economy then republicans ruin it for the next democrat.
Idk man they both ruin it. Economy was good with trump
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 1 month ago '16        #19
Itsjustmefools  topics gone triple plat - Number 1 spot x2
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 Ymmot said
Yeah but Biden looks like he'll fix a lot of trump's fu*k ups. Trump was pretty bad though.
How and what did trump fu*k up?
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 1 month ago '19        #20
ITL  topics gone triple plat - Number 1 spot x6
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 bobbysteels18 said
From Afghanistan to the economy the worst president ever. It's sad the guy who said he got the most votes in history has lost so much in 10 months. When he ran he said we need someone who can lead and fix the supply chain issues, and it's only getting worse.
Which is why they still have everyone focused on Trump.

He was part of the plan too - all this sh*t is being done by design.
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 1 month ago '05        #21
Ari Gold  topics gone triple plat - Number 1 spot x1
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You're out your mind if you don't think corporations are tweaking the price, not for inflation, but for financial gain.
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 1 month ago '04        #22
jsmooth-117 
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And yet companies will still offer nominal raises/bonuses. If even offered at all
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 1 month ago '05        #23
bobbysteels18  topics gone triple plat - Number 1 spot x21 OP
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I shouldn't have called him the worst pres he still has time to turn it around, 3 years wish him the best if he fails we all fail, and who knows if trump was still the president inflation could still be out of control. The supply chain issues could be because California passed the Gig Worker Law a lot of truckers were independent contractors and under the new law companies can't hire them. It companies can't get supplies out of cali to other states, that could cause a supplies to back up maybe.

 1 month ago '04        #24
skillahmang 
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But but you got your stimulus check

Already paid it back in full & more with just the gas price hike
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 1 month ago '11        #25
SomeOnesoN  topics gone triple plat - Number 1 spot x2
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 Sick Flair said
Even my favorite cheap sushi spot went up…

at Safeway, a tray of sushi was $12.99. Now it's $13.99. Yep, everything's going up. Employers better start hiking their wages. It would be nice if they did the right thing and increased wages with inflation like I said above, but we know that isn't happening without government regulation.
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