Inflation ran hotter than expected in September as high prices continued to squeeze U.S. households. Consumer prices rose 0.4% in September and were up 8.2% from a year ago, according to BLS data released Thursday. Those figures were both higher than the 8.1% headline figure and 0.2% monthly increase forecast by Refinitiv economists. Excluding food and energy, the core consumer price index accelerated 0.6% and 6.6%, respectively. The yearly gain for core was the highest since August 1982.
Megan Henney for FOX Business:
Scorching-hot inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.
The cost of groceries climbed 0.7% [month-over-month], putting the 12-month increase at 13.0%. Consumers paid more for items like cereal, chicken, milk and fresh vegetables.
The report will also have significant implications for the Federal Reserve, which has embarked on one of the fastest tightening paths in decades. Policymakers have already approved five straight rate hikes, including three back-to-back 75 basis point increases, and have shown no signs of slowing down.
Following the hotter-than-expected September inflation report, the central bank is widely expected to approve a fourth straight 75 basis point increase when policymakers next meet at the beginning of November.
“CPI came in hot, which virtually guarantees the Fed will hike 75 basis points next month, and at least 50 in December,” said Robert Frick, corporate economist with Navy Federal Credit Union. “And we need to brace for more bad news in October and November, as rising oil prices are likely to swing again from reducing to increasing inflation.”
The report rattled financial markets, with stock market futures plunging and Treasury yields moving up as traders priced in likely more aggressive interest rate hikes ahead from the Federal Reserve.
“The Federal Reserve has made it very clear they’re committed to price stability, they’re committed to reducing the inflationary pressures,” said Michelle Meyer, chief U.S. economist at the Mastercard Economics Institute. “The more inflation comes in above expectations, the more they’re going to have to prove that commitment, which means higher interest rates and cooling in the underlying economy.”
Closely watched shelter costs, which make up about one-third of CPI, rose 0.7% and are up 6.6% from a year ago. Transportation services also showed a big bump, increasing 1.9% on the month and 14.6% on an annual basis. Medical care costs rose 1% in September.
The rising costs meant more bad news for workers, whose average hourly earnings declined 0.1% for the month on an inflation-adjusted basis and are off 3% from a year ago, according to a separate BLS release.
MacDailyNews Take: For those who are looking for nice deals and safe harbors in tech stocks, the fact remains:
Apple iPhone customers are the most recession-proof smartphone buyers. — MacDailyNews, September 7, 2022
Again, when certain quarters, including the Fed, delude themselves and others that “inflation is transitory” and waste at least a year before doing a mere portion of what is necessary* (interest rate hikes), the price will be paid for being delusional and late.
Catching up will be difficult. But, hey, good luck on that soft landing. 🙄 – MacDailyNews, September 13, 2022
In January, Interactive Brokers founder Thomas Peterffy said of the U.S. Federal Reserve, “If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”
The Fed’s current target interest rate range is 3.00% to 3.25%. Peterffy may have been too conservative. Rates in excess of 6% may be required at this point.
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
*Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
Please help support MacDailyNews. Click or tap here to support our independent tech blog. Thank you!
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The Democrats are doing the best with the hand that they were dealt with. The current sad state of affairs is all Trump and Putin’s doing. We should all vote (twice or even thrice) Democrat straight down our ticket(s)!
Right. Obama didn’t leave any debt at all. Well, maybe a billion or two dollars in case he put on pallets and shipped off to Iran.
If not sarcasm, put down the pipe.
Peter Morici: The Fed needs to jack up interest rates a lot more.
Fed Chairman’s Jerome Powell’s policies are simply not enough. Since February, he has lifted the federal funds rate FF00, +0.00% 3 percentage points.
After taking the helm in August 1979, Paul Volcker raised the federal funds rate 6.7 percentage points in eight months.
Yet, Powell’s economy is beset by more structural problems. Both men faced troubling conditions in oil markets, but Presidents Jimmy Carter and Ronald Reagan were looking to enable domestic production not shut down drilling on federal lands.
Carter and Reagan were deregulating to lower business costs and boost competition, whereas Biden is going in the reverse direction… Powell should be doing more not less than Volcker did.
Facing a charging wild boar, Powell has eschewed his big rifle for a peashooter.
After Volcker’s initial volleys of rate increases, the U.S. economy slipped into recession in early 1980. He pulled back on interest rates but once the economy was on the mend, he really got religion and raised the federal funds rate to 19% in early 1981.
Powell needs to take those kinds of actions now.
And yet Carter added the Windfall Profits Tax, which actually hurt production.
Friend! You forgot the :s/// at the end. Such sarcasm needs to be recognized for the genius that you’ve put into it!
The midterms are coming. The brakes on this leftist horror show will be slammed on hard.
Clearly, the lights are on at the White House, but nobody’s home.
We must demand immediate negotiation of a peaceful end to the war in Ukraine or we will end up in World War Three, and there will be nothing left of our planet, all because stupid people didn’t have a clue. – The Last Duly-Elected U.S. President, October 9, 2022
By the way, for the climate folks here, it’s made the climate worse because people have this bad assumption that higher oil prices and gas prices reduce consumption, reduce CO2. No. Poor nations, India, China, Indonesia, Philippines, Vietnam, are turning back on coal plants, as are rich nations called Germany, Netherlands, France.
We have it completely backwards, and in my view, America should have been pumping oil and gas. And it should have been supported, you know, we’re trying to have our cake and eat it, too, a little bit. And so you have the, you have the problem this winter, which it sounds like they’ve got enough supply to get through this winter.
But we have a longer term problem now, which is the world is not producing enough oil and gas to reduce coal, make the transition, create security for people. So I would put it in a critical category. And this should be treated almost as a matter of war at this point, nothing short of that. – JPMorgan Chase CEO Jamie Dimon, October 11, 2022
The doubters are out. The Inflation Reduction Act is active and will bring inflation down to desired 2% levels. Karine has noted gas prices are down, (so is the SPR) and the econ is rolling.
“Gas prices are down…the econ is rolling”. WTH….where exactly? Have you filled up a vehicle with gas lately in CA, OR, or WA?! If you own an EV..how’s that electrical bill going? Just because someone say’s something doesn’t mean it’s true. Oh wait, the Democrats do that every day and think people believe them.
It’s amazing when such a statement (re: doubters”) actually needs the “sarc” footnote.
Besides, this is all we need to know: https://twitter.com/Breaking911/status/1580648924540702721?s=20&t=n9dHiZdWSjhnkjXvElJhTg
He’s got it under control. Remember, we don’t have any idea what “control” means.
As always, govt interference results in exactly the opposite outcome versus the stated “good intentions”.
Stolen Elections have Consequences.
These things happen when you use real numbers.
Fixing inflation is not that difficult unless your political agendas isn’t tied to reality or takes priority over the economy as it does with both political parties.
Cheap and abundant energy will immediately reverse inflation. Even if you’re committed to Green Energy, you still need cheap and abundant energy.
As irrefutable as 2+2=4, Government spending is the primary cause of inflation. Just like you can’t indefinitely spend money you don’t have, neither can a government. Every time the government prints and spends money they don’t have, whatever money you have is devalued so you have net less money, a dollar buys less. Balance the budget, spend within its means and the government will crush inflation.
Government regulations increase the cost of doing business. Businesses necessarily pass their cost on to consumers in higher prices.
Government taxation of business. A business exist to make money by providing a service their customers want. No business will stay open if the don’t make a profit. Any successful business pays zero any taxes. Whatever tax rate the government imposes on them is passed on to the customer as a cost of doing business. Higher taxes on companies means higher price tags, i.e. inflation.
Ever time these principles are applied, inflation is under control, new businesses start up, and innovation explodes.
Love or hate Trump, as a businessman he understood and applied these principles. They were new with him. Trump simply understood basic economics 101. Just ask yourself, were you and the county financially better off just two years ago? Be honest.
Meant to write, they weren’t new with Trump
My midterm election night party at the lake house is going to be a blowout!
You haven’t take into account the change in definitions and that all this is “transitory”.
Other than that, Biden is doing a bang up job.
Bang up as in train wreck.
Well, since y’all are being that way…
“U.S. inflation surges more than expected; core prices jump 6.6%, the fastest since 1982”
Who was POTUS in 1982?
Reagan of course.
But I doubt very seriously you understand the fundamentals of THAT inflationary period vs now or ’72 or pretty much anything.
Context:
On August 15, 1971, Nixon devalued the dollar. This exacerbated a food price shock in 1972-73.
OPEC chose this opportune time to create its first unilateral oil shortage in 1973. Nixon responded with direct government market intervention: price controls (what’s another word for that?).
The S&P cratered with the shortage of energy, reaching a low in early 1975. Inflation was 12.3%.
Who was the Fed chairman all this time? Arthur F. Burns served 1970-1978, appointed by Nixon.
Burns believed that the main goal of the Fed should be to maintain stable employment, and targeted an unemployment rate of 4.0%. President Ford retained Burns and passed out “Whip Inflation Now” campaign pins but didn’t have a solid economic plan. Deficit spending and tax reductions had little effect (nevertheless trickledown theory continues to be prescribed by some as a cure-all, apparently because they ignore this era in economic history). Inflation was ~ 7% at the time of the 1976 election. Unemployment was about 9%.
This is the mess Carter inherited. Carter fought with an unhelpful Congress but was able to get the an infrastructure investment bill passed, the 1977 Public Works Employment Act. Carter deregulated the airline industry in 1978. The economy was improving. S&P was recovering. However, progress was slow so Carter nominated G. William Miller as Fed Chairman. Miller took baby steps to raise the exchange rate, afraid to rattle the markets. His conservative approach and lack of response to the falling value of the dollar caused market concern. Then OPEC struck the US again in 1979, driving energy costs through the roof. Carter nominated Paul Volcker as Fed Chairman, who took office in August 1979. Immediately Volker began to fight the inflationary spiral aggressively, raising the Fed short term rate from 11.2% in 1979 to 20% in March 1980. But needless to say, Carter lost reelection due to economic pain and of course Iran’s international hostage crisis. Reagan won 50.7% of the popular vote. Although he campaigned with great criticism for Carter’s domestic spending, Reagan immediately commenced a huge boom in military spending (socialism by another word?), paid for by federal debt. This stimulus helped tame inflation, but working class families got hit hard. Unemployment rate zoomed to over 10%. Reagan fans of course credit the president for the reduction in inflation but many economists have studied the long term effects of excessive supply-side economic policy and have far less praise. Reagan’s policies led to spiraling federal debt (still out of control), the Savings & Loan crisis, the stock market crash of 1987, a huge increase in poverty and consumer debt, and arguably forced “Read My Lips” Bush to raise taxes to keep the lights on.
Reagan oversaw the national debt rising from $997 billion to $2.85 trillion over 8 years.
Are the extreme right wingers proposing to triple the debt to fight inflation this time around too? It seems we’re treated to political attacks and memes but I haven’t read any proposed economic policy that would solve the global inflation issue.
“I haven’t read any proposed economic policy that would solve the global inflation issue.”
That’s because you’re too busy defending Democrats, while focusing on bashing Republicans with half-truths and overdosing on liberal media doing the same carrying water for blue team making excuses for Biden.
INSTEAD of listening to sound conservative fiscal economists that have said for two years NOW, the whole problem, boils down to one problem. ENERGY.
Open pipelines and drill baby, drill…
“Open pipelines and drill baby, drill…”
Yeah no GeoB. I like my national parks and forrests/greenways….green and not littered with oil derricks & pipelines that can burst open and cause untold environmental damage
@Bringing Knowledge as usual has NONE. Does not offer solutions, just the garden variety FEAR-mongering from the radical Left. Guess you have not heard of the oil debacle pouring millions of gallons of oil into the Gulf years ago when your crowd was screaming “untold environmental damage” and the Gulf will die. Now back better than ever!
Again, the ONLY solution to fighting inflation is ENERGY. Open pipelines and drill baby, drill…
“Who was POTUS in 1982?”
Are you saying inflation and a bad economy inherited from the disastrous Carter administration was Reagan’s fault? Well, of course you are by glib one liner implication.
Time to take off the Democrat BLINDERS and SEE truths of two presidents without a clue regarding economic policy, here:
https://www.dailywire.com/news/gas-lines-inflation-rising-unemployment-return-under-biden
“Scorching-hot inflation”
Dementia Joe talks to dead politician, get’s lost leaving a podium, say’s his son died in Iraq, and thinks he’s Puerto Rican. Next he will use Steve Martin’s line, “I was born a poor black child”.
He’s making the Carter era look good. Of course this is 100% his fault and the delusional people who voted for these clowns. Anyone who tries to say otherwise or defends him, is an idiot pure and simple. Idiots always have excuses…….
So should all these government agencies and department “experts” who are continually amazed and wrong in the hoax information they disseminate.
“Inflation ran hotter than expected in…”
Thank you Brandon and Obama to make our lives easy with high inflations, high gas prices, high grocery prices.
Yeah, life is easy when you no longer have hardly any choices to make…..