Inflation Rose More Than Economists Expected In September

Prices rose more than expected last month as inflation remained near its highest level in 40 years, according to a new report from the Bureau of Labor Statistics.

The consumer price index, which is a key metric used to determine the rate of inflation, rose “0.4% for the month, more than the 0.3% Dow Jones estimate, according to the Bureau of Labor Statistics. On a 12-month basis, so-called headline inflation was up 8.2%, off its peak around 9% in June but still hovering near the highest levels since the early 1980s,” CNBC reported.

Core inflation, which excludes volatile energy and food prices, rose 0.6% in September, the same increase as in August. Core inflation also “rose 6.6 percent over the past 12 months, the largest 12-month increase in that index since August 1982,” the Bureau of Labor Statistics’ report said.

The report indicates that the Federal Reserve will issue additional interest rate hikes in order to bring inflation down.

“The Federal Reserve has made it very clear they’re committed to price stability, they’re committed to reducing the inflationary pressures,” said Michelle Meyer, chief U.S. economist at the Mastercard Economics Institute. “The more inflation comes in above expectations, the more they’re going to have to prove that commitment, which means higher interest rates and cooling in the underlying economy.”

In June, Federal Reserve Chair Jerome Powell warned that the central bank was committed to bringing inflation down to their goal of two percent and that the process will “involve some pain.”

“We are committed to and will succeed in getting inflation down to two percent,” Powell said at the time. “The process is likely, highly likely to involve some pain, but the worst pain would be from failing to address this high inflation and allowing it to become persistent.”