(VOR News) – The Biden administration has completed one inflation cycle.
On Thursday, the Labor Department reported the lowest consumer price increase since February 2021, when the president took office, in its last inflation data before Election Day.
Despite being hotter than expected, the data suggests reduced inflation, a solid labor market, and falling interest rates. September’s 12-month CPI was 2.4%, down from 2.5% in August but above the 2.3% expectation. Month over month, the index rose 0.2%, exceeding the 0.1% expectation.
Food and housing prices rose substantially. Food prices rose 1.3%, led by meat and eggs, while eating out rose 3.9%. Monthly housing costs rose 4.9% from the year before.
The latter measure pushed inflation higher.
Which excludes volatile energy and food costs, up 0.3% month over month and above the projected 0.2%.
Despite inflation stabilizing, many consumers are still adjusting to prices that are more than 21% higher than they were in 2020, with some commodities and services suffering even greater price increases. Over the previous two years, income increases have more than kept up. After inflation, September’s average hourly wage rose 1.5% over the previous year.
These net income growth have remained despite consumer pessimism. A federal study conducted this summer found that the average American worker can make $1,400 more and purchase the same products and services as in 2019.
The post-Covid U.S. economy has remained the envy of most developed nations. Still, growth appears to be decreasing.
Separate Labor Department numbers after Thursday’s inflation announcement showed unemployment claims rising. In pre-market trading on Thursday morning, the major stock indexes gave up some gains, but speculators upped the odds that the Federal Reserve will drop rates by a quarter point next month.
Voters’ main concern before November’s election is rising costs. Former president Donald Trump has accused Kamala Harris of staying silent when the Biden administration approved expenditures that he thinks contributed to the inflationary boom.
Many experts believe consumer behavior and supply chain issues have had a greater impact on inflation than fiscal stimulus. Trump has not offered a coherent economic strategy other than a broad range of tariffs up to 20%.
He claims it will generate jobs and inflation revenues.
Harris has proposed capping rent and grocery price increases, but experts doubt they will succeed. Harris has caught up to Trump in several polls about economic understanding, but Trump still leads.
Both candidates agree that rising prices hurt consumers, but their views on the economy vary nationwide. Republican economic appraisals are at an all-time low, while Democrats’ are almost three times more optimistic, according to the latest University of Michigan Consumer Survey.
An spike in gas prices has helped the Biden-Harris administration: AAA claims that the typical gallon of fuel costs 50 cents less than last year. Oil prices may rise again due to Middle East upheaval, yet one of the most clear indications of living expenses is still absent.
Today’s inflation figures may lower Wall Street’s expectations of a November Federal Reserve interest rate drop. Since last week’s shockingly excellent job numbers, speculators have almost eliminated the possibility of another half-point decrease. As of Thursday, the odds were higher than one in five.
The National Federation of Independent Business, which advocates for small business owners, found unprecedented uncertainty in its recent evaluation.
Bill Dunkelberg of the NFIB says “owners are hesitant to invest in inventory and capital spending when uncertainty persists, especially as financing costs and inflation continue to put pressure on their bottom lines.” “Many Main Street owners are left wondering whether future business conditions will improve, even though the holiday sales season holds some hope,” he stated.
SOURCE: NBC
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