If you were hoping the U.S. might be starting to see the light at the end of the tunnel regarding inflation, think again.
On Thursday, the Labor Department released the consumer price index (CPI), a measure of the prices of goods and services, for September, showing the annual inflation rate hit 8.2% — down a hair from 8.3% in August.
However, it found the so-called core CPI — a measure of goods and services excluding energy and food prices — rose 6.6% in September from a year ago, up from 6.3% in August.
The increase in core CPI marked the highest jump since 1982.
Additionally, prices increased by .6% in September.
The higher-than-expected inflation report comes despite a near-100-day streak of falling gas prices, and interest rate hikes by the Federal Reserve.
Heather Long, an economic columnist for The Washington Post, tweeted, “Rent, food and health insurance are driving inflation.”
She explained insurance costs increased 28% annually, marking the largest leap ever. Additionally, rent increased 7.2% annually, the highest jump since 1982. And groceries were up 13% from last year.
Rent, food and health insurance are driving inflation
— Heather Long (@byHeatherLong) October 13, 2022
**Health insurance is up 28% in the past year — the largest increase ever**
Rent is up 7.2% in the past year — the largest increase since 1982.
Groceries are up 13% in past year (flour, turkey and butter up the most ever)
Bill Adams, chief economist at Comerica Bank, told The Wall Street Journal, “Inflation has built up a lot of momentum over the last year.”
“That’s going to keep inflation higher than the Federal Reserve wants it for at least a couple more months—if not a couple more quarters,” he added.
President Joe Biden reacted to the news in a statement as he claimed, “Today’s report shows some progress in the fight against higher prices, even as we have more work to do.”
“Republicans in Congress’ number one priority is repealing the Inflation Reduction Act. That’s the exact wrong thing to do in this moment. If Republicans take control of Congress, everyday costs will go up – not down,” he insisted.
Biden’s last point is somewhat laughable. Prices have increased significantly under his watch — in part fueled by his $1.9 trillion American Rescue Plan — and several economists have said the Inflation Reduction Act may not actually reduce inflation.
There is no question this report spells bad news for the country. It is just another sign higher prices could be around for quite a while.
The Federal Reserve has stated it is committed to bringing inflation under control. So we can likely expect more rate increases in an attempt to cool the economy, raising the chances of a slowdown.
While this report is not good news for the country, it also cannot be good news for the Democrats, with roughly four weeks until the midterms. Running in an environment with persistently high prices, gas prices going back up, and concerns about a recession, are not a good recipe for the party in power.