The consumer price index (CPI) in the United States posted higher-than-expected growth in September, once again setting off alarms linked to a resurgence of inflation in the world’s largest economy.
The increase in the CPI and, especially, in core (or core) inflation reinforces the idea that the FED will impose a new increase in interest rates next month, which will confirm a period of recession that seems inevitable
The CPI increased in September by 0.4 percent, after a rise of 0.1 percent in August, according to what was reported this Thursday, October 13, by the United States Department of Labor.
Analysts had expected 0.2 percent.
The inflation year-on-year, therefore, it stood at 8.2 percent in the United States, measuring between September 2021 and 2022.
The only bright spot is that that level is lower than August’s 8.3 percent and June’s 9.1 percent.
Sustained inflation occurs in a context of more oiled supply chains and with the price of oil falling, which is not a good sign.
This is so because it is feared that after the new agreements of the oil producing countries and the worsening of the war between Russia and Ukraine, the value of crude oil and food will rise again.
In this scenario, financial analysts rule out that in November the FED will again raise the reference interest rate by 75 basis points.
Since March, the Fed has already raised rates three times, from zero to 3.25 percent. this policy it quells inflation because it absorbs dollars from all markets, but it almost inevitably leads to a recession.
Core inflation flies in the United States and presides over more increases
Core inflation, which is the one that does not take into account the volatile components of food and energy, it increased 0.6 percent in September.
Thus, the annual core CPI reached 6.6 percentthe largest since 1982.
Core inflation was boosted especially by the increase in the rent of housing and commercial spaces and health services.
Investors and policymakers closely monitor underlying inflation because is a good predictor of future inflation.
Social Security benefits increase
Around the same time the inflation data was announced, the US Social Security Administration announced an increase in Social Security benefits for seniors and other US residents.
It will be 8 percent in 2023the highest increase in monthly benefits in four decades.
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