Grocery prices were up again in September, driving another gain in CPI

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Written By Sristi Dumre

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Last month, inflation remained on a slight downward trend, although the decline from historic highs has been agonizingly slow, and a crucial indicator broke a 40-year record.

According to the Labor Department’s Consumer Price Index, consumer prices rose 8.2% from a year earlier, down from an 8.3% increase in August and a four-decade high of 9.1% in June, as rising food and rent expenses once more outweighed declining gasoline prices.

According to economists’ predictions, annual inflation would fall to 8.1%.

Consumer prices increased by a larger-than-anticipated 0.4% on a monthly basis after rising by 0.1% in August.

Core CPI: What is it?

However, a crucial indicator of underlying price increases reached a new historic level while total inflation is progressively slowing down. Following a 0.6% gain in July, core prices, which don’t include volatile food and energy costs and are typically a stronger indicator of longer-term trends, climbed 0.6% in August. As a result, the annual growth rate increased from 6.3% to 6.6%, marking a new 40-year record.

The cost of services, such as rent and medical care, has been rising while prices for items like used vehicles and apparel have generally moderated due to supply chain issues easing.

According to economists, the data won’t have much of an impact on the Federal Reserve’s decision to approve a fourth consecutive large increase in interest rates early next month in order to control inflation.

Stocks decline as 10-year Treasury yield rises.

The 10-year Treasury yield increased to almost 4%, while the 2-year rate reached about 4.5%. As investors priced in the possibility of additional aggressive Fed actions, stocks fell, with the Dow opening down almost 500 points. It has already pared back some of the losses, and as of 9:55 a.m. ET, it was down 239 points, or 0.8%.

Why are gas prices once again rising?

Due to concerns about a worldwide recession and decreased oil demand, gas prices fell significantly for a third month. Pump prices fell by 4.9% but were still up 18.2% annually and have been rising since OPEC announced a reduction in oil production.

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