The US inflation rate is still high, as the latest data indicate.
According to a report, the Consumer Price Index (CPI) increased by 0.4% in September, following a 0.1% rise in August, which translates into an 8.2% rise in inflation over the past 12 months.
Inflation fell from 8.3% in August; however, it remains higher than anticipated despite efforts by the Federal Reserve to curb rising costs through the increase of interest rates. It’s the third consecutive month that inflation has decreased, but a Reuters poll of economists predicted it would fall to 8.1%.
The steady rise of inflation indicates that the Fed will likely keep increasing interest rates in its effort to bring inflation back to its 2% target. The latest increase came in September when it set rates to between 3% and 3.25% — the third consecutive increase of 0.75%.
Prices were mainly pushed upwards by the cost of food, shelter, and medical care. However, these were partly offset by a 4.9% decrease in the gasoline index. The energy index also fell by 2.1%.
The food index rose 0.8 percent over the month, and the food at home index rose 0.7%. The price increase was mainly due to increases in the price of fruits, vegetables and cereals, bakery products, and the increased costs of poultry, eggs, fish, and meat.
The Federal Reserve, the US central bank, has increased interest rates five times since March, and analysts believe that the rate will rise to between 4.75% and 5% by the beginning of next year.
The Federal Reserve sent out stimulus checks to all Americans during the pandemic to alleviate financial pressures. Now, individual states are also following the same model, as the rise in inflation reduces the value of residents’ money.
California, Massachusetts, and South Carolina are among those sending financial aid to their residents. In California, some residents will be eligible for stimulus cheque payments of up to $1,050.
This story originally appeared on Money Week.