Inflation Hits American Consumers Most in Housing, Food, and Medical Care Sectors
Despite recent interest rate hikes to tame inflation, American consumers still pay higher for items ranging from housing to groceries.
The US economy continues to be roiled by price pressures, as seen in Thursday’s CPI report.
The overall CPI stood at 8.2% in September and stayed above 8% for the eighth month. A drop in fuel prices has not helped much in weathering bad news.
Sectors with the fastest price rise
Housing
The housing component of the overall consumer price is around a third, with food and medical care accounting for the balance among the main contributors to the rise in CPI in September.
As per data from the Bureau of Labour Statistics, the shelters and owners’ equivalent rent increased by 0.8% in September over the previous month, which was the highest since 1990. On an annual basis, both measures increased by, on average, 6.7%. In the meantime, the mortgage rates in the US rose to 6.92 %, which is the highest since April this year.
Groceries
Grocery prices increased 13% compared to a year ago, with items like cookies, flour, canned fruits, vegetables, and turkeys all rising to the maximum. The food index at employee sites and schools jumped 45% in September from the previous month and 91% annually.
The proposed merger of retailing supermarket giants Albertsons and Kroger will face obstacles when food prices are soaring. Antitrust officials eye mergers strictly, while politicians blame corporate greed for price rises.
Gasoline
Fuel prices dropped in September, as per Thursday’s report. However, the prices at the gasoline stations have been rising steadily since touching a six-month low last month and then climbing 7% in the next four weeks.
Candy
Candy and chewing gum prices were not spared either, and they jumped 13.1% in September compared to last year, the highest ever. The drought hit the beet sugar crop in northern states, increasing refined sugar prices and affecting candy prices.
I-bonds
The I series saving bonds are popular among consumers as they are known to protect them from inflation. However, I Bonds purchased after October will yield only 6.47% against the record peak of 9.62%. The yield is linked to the last six months’ inflation rate, which slowed down compared to the previous half.
Cities inflation
Consumer prices increased 8.2 % in September.
Geography
The price rise is across the US, but they are not consistent among the states. Tampa, Florida, has topped the list of inflation rising faster than other metro cities, and in September, it showed inflation of double digits.
Long-term pain
The monthly rates, when calculated annually, show a sharp increase in goods and services. Fresh Vegetables and fruits have gone up 19.4%, while processed ones have increased by 24.9%. Dining out expenses have gone up 11.9%, and even auto expenses are affecting the wallets of American consumers. Motor insurance increased by 20.6% annually, and repair costs up by 24.9%. Car rental services also rose by 35%.
News source: Bloomberg
About Author
