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.
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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.
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."
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Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
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