Consumer prices rose again in September, the Labor Department reported Thursday, exceeding expectations and showing that inflation remains a stubborn problem in the final monthly report before the midterm elections.
The Consumer Price Index increased 0.4% in September after rising by 0.1% in August, according to the Bureau of Labor Statistics, meaning the Federal Reserve will likely continue to raise interest rates.
The bureau said increases in shelter, food and medical costs were the biggest contributors to higher prices.
The increases were partially offset by a nearly 5% decrease in gasoline costs. But the food index continued to rise, increasing 0.8 percent over the month.
Core CPI, which excludes food and energy costs, rose 0.6% for the month, leaving core inflation at 6.6%.
The annual inflation rate of 8.2% was down slightly from 8.3% in the previous month, though it remains a burden on consumers. Inflation reached a 41-year high of 9.1% in June.
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The report of unyielding inflation guaranteed that high prices pummelling American families would continue to be a top campaign issue and a major problem for Democrats.
Senate Minority Leader Mitch McConnell said Democrats continue to downplay the problem and added fuel to the fire with recent legislation.
“Housing costs and utility bills are through the roof. Clothing, furniture, and cars have become unaffordable. Democrats have slashed families’ purchasing power and dramatically raised the price on every good and service that Americans need,” said Mr. McConnell, Kentucky Republican. “President Biden and his staff keep falsely promising that prices will come down, but their actions keep making things worse.”
The Republican National Committee seized on the report by posting footage of White House officials in 2021 and this year calling inflation transitory or betting that it had peaked and would ease.
Voters have pointed to the economy as the main factor that will determine their vote in November.
Mr. Biden responded to the new numbers by saying inflation is a global problem and he is working to accelerate supply chains and slash costs for things like prescription drugs.
“Today’s report shows some progress in the fight against higher prices, even as we have more work to do,” Mr. Biden said. “Fighting the global inflation that is affecting countries around the world and working families here at home is my top priority. Because of my economic plan, the United States is in a stronger position than any major economy to take on this challenge.”
The Fed has raised interest rates five times this year as it tries to tame historic inflation by throttling back on the economy, a move that risks a recession and job losses.
But the sour report on Thursday suggests its efforts haven’t done the job despite hopes that improving supply chains and easing demand in some sectors would resolve inflation.
The central bank is expected to consider another increase of a half-point or three-quarters of a point at their meeting in early November.
Meanwhile, the recession question will be front and center when the government’s final economic report comes out just ahead of Election Day. The Labor Department is scheduled to drop an estimate of the U.S. gross domestic product for the third quarter on Oct. 27 — less than two weeks before the elections.
On Thursday, the Dow Jones Industrial Average recovered from a large drop earlier in the day, as the hotter-than-expected inflation report made the rounds, closing up 922 points, or 3%.
The S&P 500 nudged up 2.75% and the Nasdaq Composite gained 2.29%.
Mr. Biden, who is on a three-state tour out West to stump for his party, has pointed to the Democrats’ $740 billion tax and spending bill that he signed into law over the summer as the way out of choppy economic waters.
“The Inflation Reduction Act locks in lower health care premiums for 13 million people, lowers seniors’ prescription drug prices, and caps their out-of-pocket expenses for prescription drugs at the pharmacy at $2,000 per year,” he said. “The Inflation Reduction Act will also lower families’ energy costs in the months ahead.”
Republicans say Democratic policies fueled inflation by pumping virus-relief money into the economy when it was no longer needed, creating an excess of demand when supply chains were struggling to meet it.
Republican candidates are leveraging fears about the Biden economy while Democrats have highlighted threats to democracy or the abortion fight after the Supreme Court decision to overturn Roe v. Wade.
Polls show Democrats tend to have an edge in public opinion around abortion, but the economy threatens to overshadow other issues in the final days of the campaign.
• Joseph Clark contributed to this report.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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