Key inflation measure climbs to 40-year high as Fed efforts ring futile and shoppers brace for more pain
The core Consumer Price Index — an inflation measure that excludes volatile food and energy prices — rose 6.6% in the year through September, the Bureau of Labor Statistics announced Thursday morning. Economists surveyed by Bloomberg held a median forecast of a 6.5% rate. The print marked the fastest price growth since 1982 and a hefty uptick from the previous month's 6.3% rate, raising fresh concerns that the battle against inflation is worsening.
Transportation services — which include airfares and mass transit — saw prices climb 1.9% last month, notching the largest one-month increase across core CPI components. Medical services followed with a 1% jump. The core index is viewed as a better tracker of underlying inflation pressures, since food and energy costs can whipsaw from month to month and blur the overall trend in consumer prices. Accelerating core inflation signals the Fed's rate hikes aren't yet weighing on overall price growth, and that it's more than gas and food prices that are keeping inflation elevated.
Yet rising core inflation underscores just how hard it will be for the US to put historic price growth behind it. The Fed has alreadyat the fastest pace in four decades, shifting monetary policy into a place where it will hit the brakes on economic growth.
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