US inflation rises more than expected in September

US inflation rises more than expected in SeptemberPublished38 minutes agoSharecloseShare pageCopy linkAbout sharingImage source, Getty ImagesImage caption, Egg prices in the US have jumped more than 30% in the last yearBy Natalie ShermanBusiness reporter, New YorkConsumer prices in the US rose more than expected last month in a sign that the inflation fight in the world's largest economy is far from over. Inflation, the rate at which prices rise, was 8.2% in the 12 months to September, down from 8.3% in August.Despite the fall, the figure was still higher than forecast.Inflation in the US is being closely watched as the US central bank's efforts to tame the problem push up the dollar and global borrowing costs.The rate is well above the central bank's 2% target and means the Federal Reserve is likely to continue to keep raising interest rates in an attempt to cool rising prices.Stock markets fell sharply following the report, which disappointed investors who had previously been cheered by other signs, like a decline in shipping costs, that seemed to signal the problem might be subsiding.Inflation in the US has dropped back since hitting 9.1% in June, helped by a fall in fuel prices at the pump.But the issue continues to affect other parts of the economy. Grocery prices have jumped 13% over the past 12 months, and housing and medical costs are also rising sharply.“The composition of the inflation reading is perhaps even more worrisome than the overall number,” said Seema Shah, chief global strategist of Principal Asset Management.“Increases in shelter and medical care indices... confirm that price pressures are extremely stubborn and will not go down without a Fed fight.”By raising interest rates, the Fed makes borrowing more expensive. That is intended to reduce demand, especially for big ticket items such as cars and homes, and ease the pressures pushing up prices.But by slowing activity, the Fed also risks tipping the economy into a recession. Analysts see that outcome as increasingly likely, since inflation has proven stubbornly resistant to the Fed's efforts so far.Concerns are also growing about how the Fed's rate rises, which tend to redirect money to the US and boost the dollar, will affect the rest of the world, where many countries are wrestling with their own inflation problems.US Treasury Secretary Janet Yellen, a former head of the Fed, acknowledged the worries in a speech on Wednesday saying the US was “attentive” to the global situation, but domestic concerns would guide policy.“Our path forward begins with the jobs we have to do at home,” she said. “In the United States, our top economic priority is to bring down inflation while maintaining a strong labour market.”'Christmas is not going to be as big this year'Image source, Brooke RiskeImage caption, Brooke Riske says prices for everything from groceries to dance costumes are risingBrooke Riske's family started planning to build a new home in Virginia more a year ago - only to find rising costs for materials and a sudden spike in borrowing costs force them to scale back.“We had to pump the brakes on that project,” the 36-year-old mum-of-two says. “We're still building a home, but we're having to build a home that is smaller than we wanted and having to assume a mortgage that is higher than we wanted.” The rising cost of living is hitting in other ways too, as everything from grocery bills to her daughter's dance costumes climb. Brooke, who works in education, says her wages have remained the same.“Christmas is not going to be as big this year because our money doesn't go as far and we're trying to be smart with all the unknowns,” she says, “I just feel uncertain when it comes to the next couple of years. Are we going to enter a serious recession？”More on this storyWhen will US food prices come down？6 days agoUS jobs growth slows as inflation fight intensifies6 days agoRelated TopicsUS economyInflationCost of living