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Friday, September 30, 2022

The Fed’s preferred inflation rate rose again in October on the back of rising food and energy prices.

A key inflation indicator showed that consumer prices rose at the fastest pace in three decades, as energy prices and demand for goods and services soared, causing a problem for both the White House and the Federal Reserve.

Prices rose 5 percent in the 12 months to October, according to personal consumption price index data released Wednesday. It was the fastest growing since 1990.

The rate was increased by a 30.2 percent annual increase in energy prices and a 4.8 percent increase in food prices. Prices rose 0.6 percent from September to October as supply chain disruptions continued to limit the availability of certain products and components.

The increase was in line with analysts’ expectations, but an increase in the Federal Reserve’s preferred inflation rate would only add pressure on the central bank to take quicker action to maintain stable prices.

The price hikes showed no signs of fading, as some officials in the Biden administration and the Fed said earlier this year. The central bank is facing growing calls to accelerate plans to end its bond-buying stimulus program and start raising interest rates, which could lead to a slowdown in job growth and economic growth.

While inflation has weakened consumer sentiment and affected Mr Biden’s approval ratings, this price hike was driven in part by a strong economic recovery. Separate data released by the Labor Department on Wednesday showed that initial jobless claims fell to their lowest level since 1969, dropping 71,000 to 199,000 last week.

Mr Biden welcomed the decline in jobless claims on Wednesday, but acknowledged that the country was still far from full recovery and needed to fight rising inflation.

“We still have a lot of work to do before our economy returns to normal, including tackling the price rises that are damaging Americans’ wallets and undercutting wage and disposable income growth,” Biden said in a statement Wednesday.

In an effort to lower gas prices, the United States and five other world powers on Tuesday announced coordinated efforts to use their national oil reserves. Mr Biden ordered the Department of Energy to release 50 million barrels of oil from the Strategic Oil Reserve, less than traders expected from the world’s largest emergency reserves at 620 million barrels.

Consumers are increasingly concerned about the price spike. A University of Michigan poll released Wednesday showed that consumers were less optimistic in November than at any time in the past decade about their financial outlook and overall economic growth. The decline in consumer sentiment was the result of rapid inflation and a lack of federal policies to address the damage to household budgets, according to the report.

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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