The latest data compiled by the US Department of Labor shows inflation heated up in September as buyers paid more at the checkout line.
Last month, the Consumer Price Index (CPI) jumped 0.4% after rising 0.3% in August.
Over the last twelve months, the CPI has risen 5.4%.
Fed ‘tapering’ likely to stay
Wall Street reaction suggests the latest economic data will likely not impact the Federal Reserve’s decision to begin tapering its emergency bond-buying programme in November.
Last month, Federal Reserve chair Jerome Powell did not indicate the central bank would short monthly bond purchases by more than $15bn, possibly reducing the price of long-dated bonds, raising the yield, and making future profits less valuable.
Amid the week’s economic reporting, Joey Von Nessen, a research economist at the University of South Carolina’s Darla Moore School of Business, said in an interview with Capital.com that it “will likely not affect the current timeline for the Federal Reserve’s tapering of asset purchases.”
September’s spending is up
The food index went up 0.9%, following a smaller 0.4% spike in August.
The energy index rose 1.3% in September, marking its fourth straight month of increases, while the gasoline index surged 1.2% after increasing 2.8% in August.
The index for all items less food and energy jumped 0.2%, the shelter index rose 0.4%, and the index for rent went up 0.5%.
The index for All Urban Consumers added 5.4% over the last 12 months to an index level of 274.310, while the index for Urban Wage Earners and Clerical Workers spiked 5.9% the last year to an index level of 269.086.
For September, both indexes rose 0.3% respectively.
Morning market reply
By 10:15am EDT (UTC-4), the Dow Jones Industrial Average was down 0.75%, the S&P 500 was 0.43% lower, while the Nasdaq traded 0.08% higher.
Following the US Labor Department’s report, the yield on 10-year Treasury note jumped 1.59%.