Surging prices show the Fed must continue its tough battle against inflation
By Alicia Wallace, CNN BusinessUpdated: Thu, 13 Oct 2022 13:04:28 GMTSource: CNN BusinessA key inflation report showed consumer prices came in hotter than expected in September, punishing Americans an
By Alicia Wallace, CNN BusinessUpdated: Thu, 13 Oct 2022 13:04:28 GMT
Source: CNN Business
A key inflation report showed consumer prices came in hotter than expected in September, punishing Americans and giving license to the Federal Reserve to maintain its pace of historic rate hikes.
On a monthly basis, overall consumer prices increased by 0.4% from August, according to data released Thursday by the Bureau of Labor Statistics. Economists had projected that the monthly figure would rise by 0.2%.
On an annual basis, prices rose by 8.2% in September, a slower increase than the 8.3% rise seen in August, the Consumer Price Index, which measures the changes in prices for a basket of consumer goods and services, showed. Economists had projected the pace of price increases would slow to 8.1% last month.
Core CPI, which strips out the volatile food and energy categories, measured a 6.6% increase in September year over year, setting a new high this year and reaching a level not seen since August 1982.
The month-to-month core reading showed prices rose 0.6% in September, matching August's increase of 0.6%, a number that surprised investors and triggered a market meltdown as fears grew that persistent inflation would prompt even more aggressive action from the Fed.
The Fed has raised its benchmark interest rate five times this year as part of a plan to cool the economy by squashing demand from consumers and businesses.
Dow futures tumbled more than 400 points, or 1.5%, after the report was released, S&P 500 futures fell 1.8%, and Nasdaq futures were 2.6% lower.
This story is developing and will be updated.
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