Inflation continued to surge in September, with prices rising more than expected as companies grapple with a snarled supply chain and a nationwide labor shortage, the feds said Wednesday.
The Labor Department’s Consumer Price Index, which measures a basket of goods and services as well as energy and food costs, jumped 5.4 percent in September from a year earlier.
That’s up from August’s 5.3 percent year-over-year rise in prices and matches the 5.4 percent increases seen in June and July, the biggest 12-month rise since August 2008, just before the financial crisis sent the US into the worst recession it had seen since the Great Depression.
Consumer prices rose 0.4 percent from August, the Labor Department said.
Economists surveyed by Dow Jones expected a 5.3 percent year-over-year spike in September and a monthly increase of 0.3 percent.
The core consumer price index, which excludes volatile food and energy costs, rose 4 percent from a year ago, matching the 4 percent year-over-year jump that the index saw in August.
That measure of inflation has eased since it spiked 4.5 percent in June, marking the fastest acceleration of prices it tracks since 1991.
Much of the increases this summer have been from sectors that were hit particularly hard by the pandemic and have since snapped back to high demand, such as used car prices, airfares and fuel costs.
Volatility in prices of those goods has been central to the Federal Reserve’s argument that the recent flare-up in inflation is temporary and not a reason to taper the government’s bond-buying program that’s been a boon to the stock market.
In recent months, though, Fed officials have acknowledged that inflation may be longer-lasting than previously thought as corporate executives warn that they’re going to have to continue to hike prices to make a profit, perhaps into next year.
A few factors have been driving prices higher, economists say.
The nationwide shortage of workers across various industries, including transportation, retail, hospitality and others, has forced companies to hike wages, a cost that then gets passed on to customers.
And the world’s roiled supply chain is struggling to keep up with the whiplash spike in demand for goods as countries emerge from the pandemic, leading to shortages of various goods that’s impacting nearly all industries.