Inflation in the US remains stubbornly high, the latest figures reveal. The Consumer Price Index (CPI) rose by 0.4% in September following a 0.1% rise in August, translating into an 8.2% increase in inflation over the last 12 months.
The CPI measures the change in prices paid by consumers for goods and services.
Inflation was down from 8.3% in August but remains higher than expected despite the Federal Reserve’s efforts to manage rising prices through interest rate rises. It’s the third month in a row that inflation has fallen, however a Reuters poll of economists had forecast it would drop to 8.1%.
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The maintained increase in inflation means the Fed is likely to continue raising interest rates as it attempts to get inflation back to its 2% target. The latest increase came in September, when it set rates to between 3% and 3.25% — the third consecutive increase of 0.75%.
US inflation driven by cost of food, shelter and medical care
Prices were mostly pushed up by increases in the cost of food, shelter and medical care. However, these were partly offset by a 4.9% decrease in the gasoline index. The energy index also fell 2.1%.
The food index rose 0.8% over the month, while the food at home index rose 0.7%. Prices were mostly driven by increases in the cost of fruit and vegetables, cereals and bakery products and the higher price of meats, poultry, fish and eggs.
The Federal Reserve, the US central bank, has already raised interest rates five times since March and analysts expect it to lift rates to between 4.75% and 5% by early next year.
States begin to issue stimulus cheques to help combat inflation
The Federal Reserve sent out stimulus cheques to all Americans throughout the pandemic to help with financial pressures, and now individual states are following suit as inflation erodes residents’ money.
California, Massachusetts and South Carolina are among those sending financial aid to their residents. In California, some residents will be eligible for stimulus cheque payments of up to $1,050.
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