(TheIndependentStar.com) – In a showcase of how poorly the Biden administration is managing our country and our economy, the latest release from the Bureau of Labor Statistics (BLS) reveals that inflation remains a persistent concern and remains well above the Federal Reserve’s 2% target.
The Consumer Price Index (CPI), a comprehensive measure of everyday goods’ prices, recorded a 3.7% increase on an annual basis in September, in line with August’s figure of 3.7%, surpassing the expected 3.6%, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, also remained elevated, rising to 4.1% year-over-year in September, compared to 4.3% in August.
Dr. Thomas Hogan, senior research faculty at the American Institute for Economic Research and former chief economist for the Senate Committee on Banking, Housing, and Urban Affairs, highlighted the concerning combination of high headline inflation and low core inflation. This situation places an additional financial burden on average Americans who are facing rising prices for essential items like gasoline.
Hogan noted that based on the Federal Reserve’s recent economic projections, they anticipate raising interest rates again this year. Financial markets currently project stability in November and an increase in December, but a November rate hike becomes more likely if inflation exceeds expectations.
The surge in inflation for September was driven primarily by housing costs, with shelter costs rising by 7.2% year-over-year. Additionally, the price of gasoline saw a notable increase, rising by 2.1% in just one month and by 3.0% over the year, according to the BLS. The food index also rose by 3.7% for the year, with food away from home experiencing a substantial increase of 6.0%.
Despite inflation remaining consistently above 3% in recent months, the Federal Reserve opted not to raise its federal funds rate at the September Federal Open Market Committee (FOMC) meeting, maintaining the rate within a range of 5.25% to 5.50%. The Fed will decide whether to raise rates again at its upcoming meeting on November 1. Notably, the rate has been increased 11 times since March 2022 in an effort to curb inflation, which peaked at 9.1% in June 2022.
While the U.S. economy saw an unexpected addition of 336,000 nonfarm payroll jobs in September, surpassing the expected 170,000, unemployment remained at 3.8%. However, the majority of these job gains were in part-time positions, with 151,000 Americans taking on part-time jobs while the number of full-time jobs decreased by 22,000.
Hogan emphasized that the prospect of prices decreasing in the near future is unlikely. In his view, if inflation had been driven solely by supply bottlenecks, as initially claimed by Fed officials, prices would have started to decline as supply constraints eased. However, inflation’s root cause lies in the Federal Reserve’s monetary policy, which suggests that prices will remain high and may even rise further.