Consumer prices rise more than expected as energy costs skyrocket

The Ministry of Labor reported on Wednesday that consumer prices in September were slightly higher than expected as rising food and energy prices offset the decline in used cars.

The consumer price index for all items rose 0.4% this month, compared to the Dow Jones estimate of 0.3%. Year-on-year, prices rose 5.4% from the 5.3% estimate, the highest since January 1991.

However, excluding volatile food and energy prices, CPI rose 0.2% month-on-month and 4% year-on-year, compared to their respective estimates of 0.3% and 4%.

Dow futures were slightly positive Following the news, government bond yields were mostly high.

Gasoline prices rose another 1.2% that month, with an annual increase of 42.1%. Fuel oil increased 3.9%, a sharp increase of 42.6% year-on-year.

Food prices also showed a marked rise this month, with household food rising 1.2%. Meat prices rose 3.3% in September, up 12.6% year-on-year.

Bob Dole, Chief Investment Officer of Crossmark Global Investments, said: “Hopefully we will start solving the problem of supply shortages, but when the dust subsides, inflation will not return from zero to two. [percent] It has been a place for the last 10 years. “

Used car prices, which have been the center of inflationary pressure in recent months, have fallen 0.7% this month and have fallen to 24.4% in the 12-month rise. However, continued price increases as car costs fall can give credibility to the idea that inflation is more persistent than policymakers think.

Airfares fell 9.1% in July and then 6.4% this month.

Evacuation shelter prices, which account for about one-third of the consumer price index, rose 0.4% monthly and 3.2% in 12 months. Owner-equivalent rent, or the amount that real estate owners have to pay to rent it, also increased by 0.4%, the highest monthly profit since June 2006.

“This may be an overshoot after a few relatively modest rises, but fundamentals (rapid house price rises, more aggressive landlord pricing, lower inventories, faster wages. The idea that growth is pushing up cannot be ruled out. Trends. ” Written by Ian Shepherdson, Chief Economist at Pantheon Macro Economics.

Apparel prices also fell 1.1% in September, but transportation services fell 0.5%. Both sectors are consistently rising, yet showing annual profits of 3.4% and 4.4%, respectively.

The Federal Reserve Board calls the current inflation rate “temporary,” and attributed it primarily to supply chain and demand issues that are expected to subside in the coming months.

However, that view has received considerable opposition lately.

“This is another data point that says,’Federal government, your attempt to convince us that inflation is temporary is unbelievable,'” says Dole. I did. “If you know someone who doesn’t have to live somewhere, eat no food, and don’t use energy, inflation may not be a problem, but give it a try.”

On Tuesday, the International Monetary Fund warned that the Fed and its global peers would need to prepare an emergency response plan if inflation proved to persist. That means raising interest rates faster than expected in order to curb price increases.

Later that day, St. Louis Fed President James Bullard told CNBC: He thinks the Fed should be more aggressive Withdraw financial support, especially monthly bond purchases, if inflation becomes a problem and you need to raise rates next year. Also on Tuesday, Federal President Raphael Bostic of Atlanta said the factors driving inflation were “not easy.”

“Today’s numbers shouldn’t move the Fed’s hands,” said Cima Shah, chief investment strategist at Principal Global Investors. “Inflation is already above target, and if anything, the September CPI is higher than expected, increasing the need to start tapering. The November taper is here.”

JPMorgan Chase CEO Jamie Dimon took a temporary side of the debate on Monday, saying the current situation would be resolved and inflation would not be a factor in 2022.

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Consumer prices rise more than expected as energy costs skyrocket

Source link Consumer prices rise more than expected as energy costs skyrocket

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