December 9, 2021

Inflation was high in September

U.S. inflation rose slightly in September as the epidemic-related labor shortages and shortages of commodities pushed up prices.

Consumer Price Index — The labor department that measures what consumers pay for goods and servicesSeasonally adjusted 0.4% in September Since August. This is faster than it was in August but significantly lower than the 0.9% pace in June.

On an annualized basis, inflation rose to 5.4% in September from a year earlier, slightly higher than in August. The same rate in June and JulyThis is the highest level since 2008. Excluding the often volatile types of food and energy, the so-called core price index rose 4% in September from a year earlier, the same rate as in August.

In a wild ride food markets recently, cheese has seen more volatility than most. Still in supermarkets, prices are relatively stable. Why sharp changes in wholesale cheese prices are slowing down for consumers. Description: Jacob Reynolds

Prices of groceries, petrol and heating fuels rose with the prices of new vehicles, rental and furniture. Used autos, airfare and clothing prices have dropped.

“These supply-chain and commodity challenges seem to be sticking with us for a while yet — at least by the end of this year,” said Omar Sharif, founder of Inflation Insights LLC. Recent price pressures include ensuring that house rent and other prices move very slowly.

High inflation will trigger the biggest increase in decades for the social security benefits that seniors and other Americans receive. The Social Security Administration will release its annual cost of living adjustment later Wednesday.

Rising energy prices– Demand for global recovery, destabilizing supply and geopolitical forces can also drive up prices. According to the U.S. Energy Information Administration, the price of gasoline has now risen to an average of $ 3.29 a gallon, which consumers already feel is the highest level in seven years. Steep energy bills can add to the high costs companies now face, increasing the pressure to send them to buyers.

Unusually high demand is a key factor in raising inflation. Expenditure soared 11.9% in the second quarter as more people received the Govt-19 vaccine, businesses reopened and trillions of dollars in federal aid was provided through the economy. Consumer spending continues to rise In August.

Lack of workers It puts pressure on companies to raise prices and raises wages. Economists say the sharp rise in restaurant prices over the past few months is a sign of higher wages.

Companies are struggling with shortages caused by a combination of turbulent supply chains, as well as disruption in production and increased demand due to the epidemic. The rate of sales of goods to retailers reached record lows in the spring and then increased slightly. The continuum of cargo-driver shortages and consumer demand for goods has increased ports.

Restaurant prices have risen sharply in recent months as the labor shortage raises wages. Arlington, W., Restaurant in September.


Photo:

Jacqueline Martin / Associated Press

Many companies pass by Higher labor and material costs For consumers. In September, 46% of small businesses planned to raise prices in the next three months, according to the National Independent Business Federation, since monthly records began in 1986.

“We seem to be in a slightly different environment, where workers say too much about wages and companies say too much about how prices are charged,” said James Knightley, ING’s chief international economist.

An example Lack of semiconductors that reduced auto productionCausing new and used vehicle prices to soar. The supply of new autos continues to be restricted as Govt-19 infections resurface in Asia, leading to the closure of autos and ports due to chip shortages. Prices for new vehicles are still rising, and there are signs that used car prices are rising again. Mannheim index of US used car wholesale prices Reached new highs in September Less after the summer

“We seem to be in a slightly different environment where workers can say more about wages and companies say more about how prices are charged.”


– James Knightley, ING’s Chief International Economist

Federal Reserve officials are closely monitoring a number of inflation measures to determine whether the recent rise in prices is temporary or lasting. Consumer expectations of future inflation are one such factor, which makes families more likely to demand higher wages and accept higher prices while anticipating higher future price growth. According to the New York Central Bank, consumer average inflation for September was 4.2% for three years, up from 4% a month earlier. September reading has been very high since the survey began in 2013.

Central Bank Vice President Richard Clarida said Tuesday The base rate of inflation in the US economy Fedin 2% is close to the long-term goal, thus proving that the recent rise is “mostly volatile” once supply barriers become clear. However, he said the central bank would raise rates if it saw evidence that homes and businesses were beginning to anticipate higher inflation.

“Monetary policy will reflect that,” Mr. Clarida said. “But not like that right now.”

High inflation complicates business planning in many companies.

Aham Levine, who owns a building materials distribution business based in Columbus, Ohio, began noticing rising prices in the spring. “Then it was one after another,” he said. His company, Hamilton Parker, sells masonry, tile, fireplace and other construction materials to consumers and other businesses, which quickly raised its own price.

Clogged ports, such as Los Angeles, help raise shipping prices.


Photo:

Frederick J. Brown / Agent France-Press / Getty Images

Shipping delays add to the uncertainty surrounding prices. Delivery time has been extended for all products of the company. The garage doors came in only two of the 15 weeks, Mr. Levine said. As shipments have been delayed, suppliers have already begun to raise prices on negotiated orders.

“The risk to us as a result of price changes is that projects that affect future sales may be canceled. Customer relations may be challenged based on unexpected price changes, and my team is under significant pressure to communicate these price updates,” he said.

Prices for services severely affected by Govt-19, including air travel, entertainment and recreation, are still recovering to pre-epidemic levels. The latest eruption Delta variation Many economists predict that Covid-19 may weaken in August. Conversely, as cases decrease, prices for those services will be recovered.

Write to Quinn Guilford at [email protected]

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