Inflation persists and signs in the United States

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Inflation persists and sign in the United States

The inflation was persistent in September in the United States.

Inflation was persistent in September in the United States, despite the already strong measures taken to slow it down, complicating the task of Joe Biden who, a month from the midterm elections, recently admitted the possibility of a recession.

Prices rose 8.2% in September year on year, according to the benchmark CPI index, released Thursday by the Labor Department. This represents a very small slowdown as last month year-on-year price growth was 8.3%.

But it is above all the rise in prices over just one month that shows that inflation is tenacious: price growth accelerated again, with +0.4% between August and September, against +0.1% between July and August. And that's more than the 0.3% increase that analysts had expected.

The price increases for real estate rentals, food and Medical care was the primary contributing factor to the monthly increase, the Labor Department detailed in a statement.

Gasoline prices at the pump, however, fell 4.9%, continuing to decline after surging due to the war in Ukraine.

L& Core inflation, which excludes volatile food and energy prices, remains stable over one month, at 0.6%, but accelerates over one year, to 6.6 %.

It is even a new high in 40 years, notes Rubeela Farooqi, chief economist for HFE. Consumer prices surprised on the upside in September, she commented.

Inflation has slowed, however, since peaking in June, when prices had climbed 9.1% year-on-year, the biggest increase since December 1981.

This increase in the cost of living for American households is a strong argument for opponents of Democratic President Joe Biden, one month before the mid-term elections giving rise to the renewal of some of the elected members of Congress. The slim majority of the presidential camp is at stake.

Joe Biden admitted on Tuesday that the United States could suffer a very mild recession.

< p class="e-p">Because the US central bank (Fed) is trying to slow economic activity to ease pressure on prices. But the longer inflation persists, the harder it must hit, at the risk of triggering a recession.

The September figures support aggressive monetary policy, until prices show clear signs of decelerating on a sustainable basis, Rubeela Farooqi stressed.

the Fed had estimated at their meeting of September 20 and 21 that a period of weaker growth and a slowdown in the job market would be necessary to overcome this inflation, the level of which they consider unacceptable, according to the minutes of this meeting, published on Wednesday.

They had noted that inflation had not yet responded to the rate hikes intended to curb it, and had therefore undertaken a further sharp increase in their main policy rate, by three quarters of a percentage point.

Several of these Fed officials pointed out that to act too timidly would be more costly than to act firmly on rates, judging that the tightening of monetary policy must continue, despite the slowdown in the labor market.

Also globally, the fight against high inflation is now the priority of political leaders.

This increase in price affects poor and developing countries even more than developed countries. The effects of the war in Ukraine on energy and food have added to supply chain disruptions related to COVID-19.

The International Monetary Fund (IMF) has raised its forecast for global inflation for 2022 and 2023, and now expects 8.8% and 6.5% respectively, according to its latest report, released on Tuesday.

And it warned that recession is likely to hit several developed countries in 2023, as the economies of the world's three powerhouses – the United States, China and Europe – are slowing, especially on the back of this persistent inflation.

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