By John Ikani
Consumer prices in the US soared to a 40-year high in September, a sign that the inflation fight in the world’s largest economy is far from over.
US prices rose 0.4 percent in September compared to August, twice the 0.2 percent projected by analysts, with price increases for food, shelter and medical care weighing on consumers, according to data from the Bureau of Labor Statistics.
The annual rate of inflation slowed slightly to 8.2 percent from 8.3 percent, according to the report.
Inflation in the US has dropped back since hitting 9.1% in June, helped by a fall in fuel prices at the pump.
However, the current 8.2% rate is well above the central bank’s 2% target and means the Federal Reserve is likely to continue to keep raising interest rates in an attempt to cool rising prices.
In September, the Fed enacted its third straight increase of 0.75 percentage point as Fed Chair Jerome Powell acknowledged that there isn’t a “painless” way to bring inflation down.
But the data Thursday showed the Fed’s actions thus far have come nowhere near realizing the goal of two percent inflation over the long run. The central bank has aimed to stop inflation before it becomes engrained in the economy.
Republican candidates have blamed Biden for broad-based price increases in trying to win back control of Congress from Biden’s Democratic party, tying high gasoline prices to Democratic resistance to new oil and gas drilling and Biden’s efforts to address climate change.
Treasury Secretary Janet Yellen and other Biden administration officials have defended their policies, attributing price increases to supply chain problems and other unforeseen events, such as the Russian invasion of Ukraine that has boosted prices for energy, wheat and other commodities.
