The good news and bad news about the latest US data on cost of living. Housing prices increased 7.2% over the last year, according to the Bureau of Labor Statistics.
The highly anticipated inflation gauge is out. It shows that consumer prices in September rose 0.4% from the previous month, and 3.7% from a year ago, steady from the 3.7% increase posted in August, according to the latest Bureau of Labor Statistics (BLS) data.
The shelter index—mostly composed of rental costs—increased 7.2% over the last year. That accounted for 70% of all price increases minus food and energy, with gasoline also a major contributor to the rising inflation.
The good news
The consensus is this data is unlikely to prompt the Federal Reserve to hike interest rates at its next meeting. In fact, “today’s data supports being close to the end of the hiking cycle as the US economy remains on a disinflation path,” wrote Goldman Sachs Asset Management’s Lindsay Rosner, head of multi-sector fixed income investing, in a note to clients.
The bad news (okay, it’s not that bad)
The two major factors driving September’s inflation were gasoline and housing prices.
Motorists should feel slightly relieved at the pump, with gas prices steadily declining over the last week despite the Israel-Hamas war. The national average price of gasoline as of today (Oct. 12) is $3.65, down from $3.84 from a month ago, according to the American Automobile Association (AAA).
The surprise in September was the big bump in housing costs. But analysts aren’t worried, as they’re already seeing signs elsewhere suggesting that growth in rent prices will moderate.
Pensioners feel the pinch from cost of living
With inflation moderating, Americans receiving Social Security benefits will get a cost-of-living adjustment of 3.2% in 2024, down from the 8.75% boost implemented this year, according to the latest release from the Social Security Administration. But even that hasn’t covered the strain on household budgets. A report from the Seniors Citizen League found 68% of people on Social Security said that household expenses have been 10% higher than the year before, despite cooling inflation.
Meanwhile, over half of the survey respondents were worried Social Security payments will be insufficient to cover their future living costs.
With the increase now set for 2024, pensioners will receive an average of $50 more per month in their Social Security benefits.
The whole article and charts can be found here.
