There is little relief in sight for U.S. consumers paying more for essentials like food and shelter, as inflation continues to be a hallmark of the economic recovery.
There seems to be little relief in sight for consumers in the United States who find their dollars stretching less and less these days.
The consumer price index (CPI) rose 0.4% in September after rising 0.3% the previous month, the US Department of Labor said on Wednesday.
Over the past 12 months, the prices consumers pay for goods and services in the world’s largest economy rose 5.4% in September.
This rate corresponded to the months of June and July and brings the annualized inflation rate back to its highest level since 2008.
Energy prices continued to climb in September, with oil prices increasing 1.2% from the previous month and fuel oil 3.9%.
Rising food and shelter prices accounted for more than half of September’s CPI gain – the food index increasing 0.9% from the previous month and prices paid by tenants increasing by 0.5%.
“We have seen other measures of rent increases already, and this is now starting to affect the CPI,” Capital Economics chief US economist Paul Ashworth said in a note to clients. “This is important because these components make up over a third of the base index.”
The so-called “core” index, which excludes more volatile food and energy prices, rose 0.2% in September, after increasing 0.1% in August.
Inflation has become a hallmark of the U.S. economic recovery since last year’s COVID lockdowns, fueled by a combination of demand stimulus, supply chain bottlenecks and fuel shortages. raw materials.
These forces have raised prices for businesses, many of which then pass on to consumers.
Labor shortages are also a problem in the United States, even though the economy still lacks around five million jobs to recoup the 22 million jobs lost in the first round of COVID lockdowns from last year.
Some 4.3 million American workers quit their jobs in August – the highest rate ever – while 10.4 million jobs went begging in the same month.
The number of people leaving their jobs and the large number of vacancies have become a source of growing concern for the country’s economic recovery.
Just over half of U.S. small business owners said they had vacancies they couldn’t fill in September, according to a survey by the National Federation of Independent Businesses.
To lure workers off the sideline, companies are offering incentives such as signing bonuses and pay raises. These higher wages often translate into higher prices charged to consumers, meaning that bigger paychecks don’t necessarily translate into more abundant household finances.
Fears of contracting COVID, along with a lack of childcare options and savings accounts started with stimulus help, have been cited as factors preventing unemployed workers from finding new positions.
The impact of the Delta variant was clearly visible in Wednesday’s CPI numbers. Prices paid in areas with direct contact with customers such as travel fell in the last month. But “with the wave of Delta-related infections now subsiding, demand for high-contact services is expected to rebound,” Ashworth said.