TNews – The United States experienced higher-than-expected inflation in September, with implications for the Federal Reserve (The Fed) possibly raising interest rates, following robust labor market data. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose to 3.7% year-on-year in September 2023, slightly surpassing economists’ projections of 3.6%. In this article, we explore the key factors contributing to this inflationary trend, its impact on the economy, and the Federal Reserve’s response.
In a recent report by the Bureau of Labor Statistics, the Consumer Price Index (CPI) revealed that the inflation rate in the United States stood at 3.7% year-on-year in September 2023. This figure remained consistent with the previous month, albeit slightly higher than the 3.6% projected by economists. On a monthly basis, inflation decelerated from 0.6% in August 2023 to 0.4% in September 2023, primarily due to reduced energy prices. However, the core inflation rate, which excludes the volatility of energy and food prices, remained stable at 0.3% on a monthly basis. On an annual basis, core inflation saw a marginal decline from 4.3% to 4.1%.
The rising cost of housing has been a significant driver of the September inflation surge. The housing index, which contributes to roughly one-third of the CPI, increased by 0.6% during the month and by 7.2% from the previous year. On a monthly basis, housing accounted for over half of the CPI increase.
Alisher Khussainov, the head of inflation at Citadel Securities, commented on the report, describing it as a “warning sign for The Fed.” He stated, “The data we’re receiving – growth, wages, inflation – they’re all pointing in the same direction, suggesting the economy is accelerating compared to the impending recession… A higher degree of vigilance will be required from the central bank’s perspective.”
