Tag Archive for: consumer price index

Inflation Soars As High Prices Continue To Squeeze Americans

Inflation rose year-over-year in December, even as the Federal Reserve projects interest rate cuts by the end of the year, according to the latest Bureau of Labor Statistics (BLS) release on Tuesday.

The consumer price index (CPI), a broad measure of the prices of everyday goods, increased 3.4% on an annual basis in December and 0.3% month-over-month, compared to 3.1% year-over-year in November and above expectations of 3.2%, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, remained high, rising 3.9% year-over-year in October, compared to 4.0% in November.

Inflation rose year-over-year in December, even as the Federal Reserve projects interest rate cuts by the end of the year, according to the latest Bureau of Labor Statistics (BLS) release on Tuesday.

The consumer price index (CPI), a broad measure of the prices of everyday goods, increased 3.4% on an annual basis in December and 0.3% month-over-month, compared to 3.1% year-over-year in November and above expectations of 3.2%, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, remained high, rising 3.9% year-over-year in October, compared to 4.0% in November.

“It was unseasonably warm in December, which boosted gasoline prices enough to send the monthly headline number up a bit,” Peter Earle, economist at the American Institute for Economic Research, told the Daily Caller News Foundation. “Disinflation is continuing, but the last percent or two down to the Fed’s target range are going to be tougher to nail down.”

Shelter contributed the most to the monthly gain, with prices rising by 0.5% for the month and 6.2% for the year, according to the BLS. Prices for energy rose 0.4% for the month, reversing the trend of declining energy prices that stands at -2% for the year.

Prices for motor vehicle insurance continued to trend up, rising 1.5% in the month following an increase of 1% in November, according to the BLS. The index for food also had a similar increase in November of 0.2%, totaling 2.7% year-over-year.

“It was unseasonably warm in December, which boosted gasoline prices enough to send the monthly headline number up a bit,” Peter Earle, economist at the American Institute for Economic Research, told the Daily Caller News Foundation. “Disinflation is continuing, but the last percent or two down to the Fed’s target range are going to be tougher to nail down.”

Shelter contributed the most to the monthly gain, with prices rising by 0.5% for the month and 6.2% for the year, according to the BLS. Prices for energy rose 0.4% for the month, reversing the trend of declining energy prices that stands at -2% for the year.

Prices for motor vehicle insurance continued to trend up, rising 1.5% in the month following an increase of 1% in November, according to the BLS. The index for food also had a similar increase in November of 0.2%, totaling 2.7% year-over-year.

The current rate of inflation stands in contrast to the Fed’s target rate of 2%, which it aims to achieve through its use of its federal funds rate, which it has set in a range of 5.25% and 5.50%, the highest point in 22 years, in response to soaring inflation under President Joe Biden, which peaked at 9.1% in June 2022. In their last Federal Open Market Committee meeting, a median of Fed governors estimated that the federal funds rate would be around 4.6% by the end of the year, indicating around three rate cuts.

The CPI report comes less than a week after the BLS announced that the economy added 216,000 nonfarm payroll jobs in December, despite revising the number of jobs down in October and November by a collective 71,000. In total, the number of jobs was revised down by 749,000 in 2023, around one-quarter of those initially announced.

“Right now, the Fed is projecting three rate cuts in 2024, while futures are suggesting five or six,” Earle told the DCNF. “I think that as long as the general price level keeps falling, the Fed will stick to its 75 [basis point] cutting plan. But if we get clearer signs of a slowdown in the late spring and early summer, we may indeed see four or five cuts this year.”

AUTHOR

WILL KESSLER

Contributor.

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Inflation Stays Hot As High Prices Continue To Plague Americans

Inflation remained high in September, staying well above the Federal Reserve’s 2% target, according to the latest Bureau of Labor Statistics (BLS) release on Thursday.

The Consumer Price Index (CPI), a broad measure of the prices of everyday goods, increased 3.7% on an annual basis in September, compared to 3.7% in August, exceeding the expectation of 3.6%, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, remained high, rising to 4.1% year-over-year in September, compared to 4.3% in August.

“The combination of high headline inflation and low core inflation is doubly bad for average Americans since the economy seems to be slowing but they are still paying higher prices for gas, one of their most important purchases,” Dr. Thomas Hogan, senior research faculty at the American Institute for Economic Research and former chief economist for the Senate Committee on Banking, Housing and Urban Affairs, told the DCNF. “Based on the Fed’s most recent economic projections, they expect to raise interest rates one more time this year. Financial markets are currently projecting them to keep rates steady in November and raise in December, but if inflation comes in higher than expected, it would make a November rate hike more likely.”

Shelter made up more than half of the increase in inflation for September, rising 7.2% year-over-year, while the rise in the price of gasoline was also a significant contributor, rising 2.1% for just the month and 3.0% for the year, according to the BLS. The index for food rose 3.7% for the year, with food away from home rising 6.0%.

Despite inflation persistently remaining above 3% over the last few months, the Fed chose not to raise its federal funds rate at the last Federal Open Market Committee (FOMC) meeting in September, keeping the rate at a range of 5.25% and 5.50%, and will announce whether or not rates will be hiked again at the conclusion of its next meeting on November 1. The rate has been hiked 11 times since March 2022 in an effort to bring down inflation that peaked at 9.1% in June 2022.

The U.S. economy unexpectedly added 336,000 nonfarm payroll jobs in September, far higher than the 170,000 that were expected, while unemployment remained at 3.8%. Despite the large addition, the gain was dominated by an increase of 151,000 Americans becoming employed in part-time jobs, while the number of people employed in full-time jobs dropped by 22,000.

“Some Americans are asking when prices will start coming down,” Hogan told the DCNF. “The short answer is: never. If inflation had been caused by supply bottlenecks, as Fed officials initially claimed, then we would see prices fall as the supply constraints went away. In reality, inflation was driven by the Fed’s bad monetary policy, which means prices will remain high and will only go higher.”

AUTHOR

WILL KESSLER

Contributor.

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All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Prices Stay Sky-High In October As Inflation Continues To Run Hot

Inflation rose 0.4% on a monthly basis in October as the annual rate undercut expectations to come in at 7.7%, according to the Bureau of Labor Statistics (BLS).

Economists predicted that inflation would grow 0.6% on a monthly basis and 7.9% on an annual basis in October, according to a survey conducted by Bloomberg. Core inflation, which discounts the prices of food and energy due to their volatile nature, increased 0.3% on a monthly basis, but nudged down in October to 6.3% on an annual basis from September’s 40-year high of 6.6%, the BLS reported.

“A strong labor market and strong job growth supports strong demand, which allows inflationary pressures to stay elevated,” U.S. economist at T. Rowe Price, Blerina Uruci, told The Wall Street Journal. “You’ve got more demand chasing goods and services, the supply of which is being impaired at the moment for a number of reasons.”

Food prices were up 10.9% on an annual basis, continuing to moderate slightly from the 40-year highs set in August but still well above February’s 8.6%, which was a record at the time, and more than five times greater than the Federal Reserve’s target of 2% inflation for all items.

Investors took recent remarks from Jerome Powell as an indication that the Fed will likely stop raising interest rates at a higher level than previously anticipated, Yahoo Finance reported Sunday.

AUTHOR

JOHN HUGH DEMASTRI

Contributor.

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Key Inflation Indicator Remains Sky-High In Another Worrying Sign For Businesses

The prices faced by producers rose by 8.7% year-on-year in August as inflation continues to challenge businesses, according to the Bureau of Labor Statistics (BLS).

While down from the near-record highs of 11.3% in June, the current price increases were over 4 times the typical rates — between 1 and 3% annually — seen in 2019 and 2020according to data from the Bureau of Labor Statistics’ Producer Price Index (PPI), which measures the prices suppliers charge businesses and other customers. These elevated rates mirror Tuesday’s Consumer Price Index (CPI), which pegged inflation at 8.3%, according to the BLS.

A significant component of the decrease was accounted for by a 5.2% decline in energy costs, according to the BLS. Mirroring July’s results, the index for foods and all goods less food and energy rose by 0.1% and 0.2%, respectively.

The index for all products other than foods, energy and trade services rose by 5.6% year-over-year,  less than the 5.8% posted in July, according to the BLS. The price for unprocessed goods was still incredibly elevated, at 36.1%, more than July’s value of 30.4%, as a spike in the price of natural gas kept prices up.

The Biden administration has been taking a victory lap on economic conditions, with Treasury Secretary Janet Yellen claiming the economy had undergone one of the fastest recoveries in modern history. President Joe Biden claimed that the passage of the Inflation Reduction Act had helped to combat inflation “at the kitchen table,” in a Tuesday speech at the White House.

Simultaneously, the BLS’ monthly CPI report placed inflation at 8.3%, and found that food prices had increased 13.5% annually. Rent and electricity were also up, 6.7% and 15.8% respectively.

Increased rent prices have put pressure on families in particular, with the average cost of a single family rental home up about 13.4% this year, according to CNBC. At a median cost of $2,495 per month, families who might otherwise save to purchase a house are being priced out of home ownership, CNBC reported.

Gas prices also remained incredibly elevated, despite having fallen 12.2% month-on-month, and were still up 25.6% compared to the same time last year, the BLS reported.

AUTHOR

JOHN HUGH DEMASTRI

Contributor.

RELATED ARTICLE: Food Prices Hit 40-Year High, Keep Breaking Records Every Month

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.