Inflation continues to rage in the United States, despite remaining stable in general terms, while the Federal Reserve (Fed) is debating whether to apply further increases in interest rates, when it has already set the bar at the highest level in 22 years. Prices rose 0.4% in September compared to August, a rise higher than forecast (0.3%), although below the 0.6% in July.
From one year to the next, prices stand at 3.7%, still far from the 2% that the Fed sets as the point to be achieved, somewhat higher than what analysts expected (3.6%). However, they remain unchanged compared to the previous month. From this it follows that consumers experienced a moderate increase as the prices of some goods and services gradually increased.
The increase in the cost of oil contributed decisively to the fact that prices did not drop as predicted, while more problems regarding fuel supplies were looming due to the conflict between Israel and Palestine.
Excluding the most volatile elements, such as energy and food, core inflation rose 0.3% monthly and 4.1% annualized, both data in line with expectations. These are percentages closely observed by the Fed when deciding its monetary policy.
In line with recent trends, housing was the most relevant factor for the increase in inflation, which represents a third of the consumer price index, with an acceleration of 0.6%, placing it at 7. 2% compared to last year.
The cost of energy grew by 1.5%, including 2.1% for gasoline and 8.5% for oil. Food rose 0.2% for the third consecutive month. The price of services, a key element in the direction of long-term inflation, also added 0.6% and stood at 5.7% on a twelve-month basis.
The stock market showed a modest reaction to this new report, with slight gains as soon as it was known.
The data reflects that salaries fell in real terms. The hourly average increased by 0.2% in August, which makes it below the monthly increase in inflation. On an annual basis, the increase reaches 0.5%.
All these elements can play an important asset when the governors of the US central bank meet in November. According to the minutes of their September meeting, when they left the rates as they were, the members of the Fed considered that they should maintain their policy of containing inflation. Some expressed their disagreement about how much more needs to be done in this restrictive policy to keep prices under control, measures that have not yet managed to curb either demand or the labor market.
Most indicated that a further increase would be appropriate in the future, probably before the end of the year. The Fed is at the crossroads of seeking to lower prices without pushing the economy into recession, while rising rates make it increasingly difficult to borrow money and this makes it difficult for people to decide to buy a house or a property. car.
Investors seem to be betting that the Fed has ended its period of making money more expensive. The Federal Reserve has raised interest rates eleven times since March 2022 and has placed it at 5.25%-5.5%, from practically zero. Inflation climbed to 9.1% annualized in June of last year.
