How the high price of energy impacts American consumption


How the high price of energy impacts American consumption

The price increase represents the highest increase recorded since January 1991.

Photo: Karolina Grabowska / Pexels

Consumer prices rose slightly more than expected in September, as rising food and energy prices offset declines in used carsthe Labor Department reported on Wednesday.

The Consumer Price Index (CPI) for all articles it rose 0.4% in the month, compared to the 0.3% estimated by Dow Jones. In year-on-year terms, prices increased 5.4%, compared to the estimate of 5.3%, which represents the highest increase since January 1991.

However, excluding volatile food and energy prices, the CPI increased 0.2% on the month and 4% on the year.

The prices of gasoline rose another 1.2% in the month, which raised the annual increase to 42.1%. Diesel rose 3.9%, representing an annual increase of 42.6%.

Food prices also registered important increases in the month, with a 1.2% increase in food delivery. Meat prices rose 3.3% only in September and increased by 12.6% year-on-year.

Second-hand car prices, which have been at the center of much of the inflationary pressures in recent months, fell 0.7% in the month, with which the 12-month increase was reduced to 24.4%. However, the continued rise in prices, even with falling vehicle costs, could lend credence to the idea that inflation is higher than politicians think.

Airfares fell 6.4% for the month, after falling 9.1% in July.

House prices, which represent about a third of the CPI, increased 0.4% in the month and 3.2% in the 12-month period. The rent equivalent to that of the owners, that is, what a homeowner would have to pay to rent it, also increased by 0.4%, its largest monthly increase since June 2006.

Clothing prices also fell 1.1% in September, while transportation services fell 0.5%. Both sectors have been rising steadily and still showed respective annual gains of 3.4% and 4.4%.

Federal Reserve officials have rated the current “transitory” inflation streak, and they attribute it largely to supply chain and demand problems, which they expect to diminish in the coming months.

On Tuesday, the International Monetary Fund warned that the Fed and its peers around the world should prepare contingency plans in case inflation is persistent. That means raise interest rates earlier than expected to control price increases.

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Source-laopinion.com

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