U.S. inflation rate rises to 13-year high of 5.4%
Energy costs have soared by 25 per cent in past year
The U.S. inflation rate rose to a 13-year high in September as rising costs for food and shelter pushed the rate up to 5.4 per cent.
Higher prices for food and shelter made up half of the increase in the overall rate, the U.S. Bureau of Labour Statistics said in a release. But the biggest individual category increase was energy, the cost of which has risen by almost 25 per cent in the past year.
Economists were expecting the number to come in at around 5.3 per cent, which would have been the highest rate since 2013. But the figure ended up being higher than it's been since 2008, right before the financial crisis.
The COVID-19 pandemic that started in early 2020 caused demand for all sorts of goods and services to plummet. But that demand is now returning so swiftly that supply chains can't keep up, which is leading to huge price spikes in just about everything.
"Consumers are feeling the pinch from higher costs for many essentials, with the pace of inflation outstripping wage growth since the spring," said Leslie Preston, an economist with TD Bank.
Not everything is getting more expensive, however. While the price of used cars and trucks has skyrocketed during the pandemic, both have now fallen for two months in a row. Airline fares and apparel prices also fell during the month.
"Many travel-related prices that were hot in the spring are trending down," Preston said.
And the price of medical care fell by 0.1 per cent during the month, while the cost of medical care commodities is down by 1.6 per cent in the past 12 months.