The US inflation spike is not over, with US government data released on Wednesday showing that prices for food and rent increased in the world’s largest economy last month.
The US Department of Labor’s consumer price index (CPI) rose 5.4 percent, seasonally adjusted, last month compared with the same month last year.
From August, it rose just above analysts’ forecasts to 0.4 percent.
Food and housing prices accounted for more than half of the overall gain, the department said, while the impact of rising global energy prices was also apparent in the data, which some economists said might indicate that inflation is on track to continue.
“The pickup in shelter costs is something to watch, as it could offset some of the slowdown in inflation that occurs as current supply chain disruptions are resolved,” Grant Thornton International Ltd lead economist Diane Swonk wrote on Twitter.
The US has dealt with price increases throughout this year as businesses reopen from COVID-19 shutdowns, and supply chains deal with shortages and delays.
The inflation presents a challenge to US President Joe Biden, whose opponents have said that his spending plans are excessive.
It has also vexed the US Federal Reserve, which has indicated that it might begin pulling back on monetary stimulus by the end of the year, but wait longer to raise its borrowing rate, despite concerns that the central bank’s easy monetary policies are allowing prices to climb.
Minutes from last month’s Fed policy-setting meeting released on Wednesday said that “most participants saw inflation risks as weighted to the upside because of concerns that supply disruptions and labor shortages might last longer” and have a greater effect than forecast.
While the central bank prefers to get its inflation numbers from the US Department of Commerce, the CPI data contain dynamics that seem to be on Fed leaders’ minds.
Excluding volatile food and energy prices, inflation rose 4 percent last month compared with a year earlier, the report said.
Compared with August last year, it was up 0.2 percent.
Among the categories that drove the overall inflation gains, food rose 0.9 percent and the food at home category, which includes groceries, climbed 1.2 percent.
The impact of rising global oil prices was seen in the data, with the gasoline index climbing 1.2 percent from August and energy overall rising 1.3 percent.
Over the past 12 months, energy prices rose 24.8 percent and food prices are up 4.6 percent.
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