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Inflation heats up again, days before midterm elections
PBS • • business
Key Points:
- The Federal Reserve's closely watched inflation gauge showed consumer prices rose 3.6% year-over-year in September, up from 3.4% in August, with a monthly increase of 0.5%, the highest since May.
- Rising gas prices, driven by Middle East tensions pushing oil above $100 a barrel, significantly contributed to inflation, alongside increased costs for services like shipping, hotels, and utilities.
- Core inflation, excluding energy and food, also rose 3.1% annually in September, indicating broader price pressures beyond volatile sectors.
- Despite strong economic growth of 3.4% in Q3 fueled by consumer spending and AI investment, inflation is eroding real incomes, causing consumers to rely more on savings and credit, which may dampen future demand.
- The Federal Reserve recently held interest rates steady but may raise them in December due to persistent inflation and robust economic activity, potentially increasing borrowing costs for Americans.
