November 27, 2022

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US inflation hit 6.2% in September - E24

US inflation hit 6.2% in September – E24

The US central bank’s preferred target for price growth remains unchanged, somewhat lower than expected.

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Personal consumption expenditures (PCE) inflation came in at 6.2 percent for the month of September compared to the same month last year, according to the latest figures from US Bureau of Economic Analysis.

This is the preferred measure of the US central bank (the Federal Reserve) for price growth in a country. The number is often decisive when the central bank sets the interest rate.

Economists in advance had expected the total price hike to rise to 6.3 percent year-on-year, according to figures obtained by Bloomberg.

In the previous measurement, in August, inflation was 6.2 percent.

The long-term inflation target in the United States, as in Norway, is around 2%.

Energy and food prices are on the rise

Energy prices rose 20.3 percent in September, compared to the same month last year. Somewhat lower than the measure for August, where prices rose 24.7 percent.

On a monthly basis from August to September, energy prices fell 2.4 percent.

Food prices rose 11.9 percent in September, compared to the same month a year earlier. It’s slightly lower than in August, when prices rose 12.4 percent.

Core PCE inflation, which subtracts food and energy prices, ended at 5.1 percent.

Waiting for another triple increase

Earlier in September, the Federal Reserve raised the interest rate by 0.75 percentage points for the third time in a row, and the range is now between 3.0 and 3.25 percent. It is the highest since 2008. The moves come at a time of rising inflation and robust wage growth in the United States.

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The US central bank is expected to raise interest rates again on Wednesday next week. Bloomberg compiled estimates that for the fourth time in a row there will be a new triple increase of 0.75 percentage points.

US Central Bank President Jerome Powell has repeatedly stressed that price inflation is too high, and that he will do what it takes to bring it down to the 2% target.