Stressed supply chains and 'unusually high demand' pushed consumer prices higher last month

The U.S. consumer-price index, which measures what consumers pay for goods and services, rose 0.4 perent in September, "faster than in August but down markedly from June's 0.9% pace," The Wall Street Journal reports Wednesday, per data from the Labor Department. Meanwhile, inflation accelerated slightly over the same period, "as pandemic-related shortages of labor and materials continued to push up prices."

Inflation rose on an annual basis, as well, as the CPI climbed 5.4 percent in September from a year earlier, per the Journal. Such a jump was "more than expected," notes The New York Times.

"It looks like some of these supply-chain and inventory challenges are going to stick with us for a bit longer—at least through the rest of this year," said Omair Sharif, founder of Inflation Insights LLC. Prices for groceries, gasoline, heating fuels, new vehicles, rent, and furniture rose, while that of used cars, airline fares, and apparel fell, notes the Journal.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
See more
See more

Supply shortages as a result of "clogged shipping routes and labor shortages at ports," coupled with "unusually high demand" for goods, are threatening the Federal Reserve's continued belief such inflation is "transitory" — if the disruptions last long enough, it could "prompt consumers and businesses to expect higher prices" and cause an upward, inflationary spiral, writes the Times.

The Times' Ben Casselman also notes that "base effects" — or, "the impact of the drop in prices earlier in the pandemic" — are not the main driver of September's CPI increase, although they are, of course, still playing some role.

See more

Fed officials said they would step in if inflation proves persistent, but would prefer to wait until the job market has further stabilized, notes the Times, writing that such "potentially conflicting goals could set the stage for a tense 2022."

To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us