CONSUMERS in the United States paid more for food and gas last month, although inflation outside those volatile categories was tame.
The Labor Department says the Consumer Price Index rose 0.3 percent in September, below a 0.4 percent rise in August. Excluding food and energy, so-called core prices gained 0.1 percent, the smallest rise since March.
Inflation has worsened this year, after the cost of oil, grains and other commodities rose in the spring. But economists see price increases to moderate in the coming months as weak growth lowers commodity prices.
A small amount of inflation is good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.
Americans are facing higher food and gas prices at a difficult time. Unemployment has been roughly 9 percent for over two years. Hiring is slow and few people are seeing much in the way of pay raises. Steeper prices for basic necessities have forced many to cut back on more discretionary purchases. That has slowed overall growth.
Food prices rose 0.4 percent in September, pushed up by big increases in dairy, cereals, and fruits and vegetables. Gas prices rose 2.9 percent.
Dairy prices have jumped 10.2 percent in the past year. Gas prices have soared 33.3 percent.
Those increases are key reasons overall inflation has jumped 3.9 percent in the 12 months ended in September, the largest annual increase in three years. Core prices have added 2 percent for the same period.
At the same time, inflation-adjusted average hourly earnings fell 0.1 percent in September, the department said yesterday. In the past year, average inflation-adjusted hourly earnings have dropped 1.9 percent.
The annual increase in consumer prices means that 55 million Social Security beneficiaries will receive higher benefits next year. They will get a 3.6 percent cost-of-living rise, the first since 2009. Inflation has been so low in the past two years that Social Security checks haven't changed.
Source:shanghaidaily