US inflation rises more than expected

While new data on Thursday showed that US inflation in September rose faster than expected, Houston teacher Sally Horton regrets she didn't change her house windows from single-pane to double-pane before the pandemic.

"I did a quote in 2019 but thought I should wait a bit to save more for the major investment. Then COVID-19 happened. Now the new quote is about 40 percent higher. I wish I didn't hesitate then," Horton told China Daily.

Horton sees prices jump on almost everything. "My impression is that, compared to pre-pandemic, some food prices have gone up by 40 to 50 percent from grocery stores to restaurants. We have to reduce the frequency of dining out to deal with the high inflation," she said.

Horton also said her family is poorer now because their income increase of a few percent is far outpaced by the rise of living costs. She isn't sure how long she will have to wait before she can change the windows.

Her experience is reflected in the inflation data released Thursday which showed that the consumer prices have climbed more than expected and reached 8.2 percent this year through September.

Excluding volatile food and gas prices, the core inflation rate rose 6.6 percent in September, up from 6.3 percent in August. This represents the biggest jump since August 1982, a new 40-year record.

The data showed that core services prices rose at a one-month annualized rate of 9.9 percent, the highest increase since 1982. Prices for motor vehicle repair services rose 2.2 percent in September from August. Dental care also posted big price increases.

Service prices, reflecting labor costs, are also rising. Data showed that average hourly wages in the three months through both July and August were 6.7 percent higher than a year ago.

Julia Jenkins, a mother of two in Houston, told China Daily that she is now paying $70 per hour for her daughter's art tutor, an increase of $20 post-pandemic. Her lawn service company has also raised price by 17 percent.

"We are starting to see persistent inflation creeping into the economy," Steve Rick, chief economist at CUNA Mutual Group, told New York Times. "We are really concerned about this turning into a wage price spiral, with wages rising and making it hard to get inflation down anytime soon."

While the price of gas has come down somewhat over the summer, food prices continue to rise at a high rate. The data show that on an annual basis, the food index rose 11.2 percent. On a monthly basis, the price of potatoes rose 3.5 percent, apples gained 5 percent and lettuce increased by 6.8 percent. Milk and eggs, which had risen sharply earlier this year, went down slightly.

Higher food prices are driven by many factors including more expensive gasoline, rising wages and prices of packaging and fertilizers. The Russia-Ukraine conflict has also disrupted exports of wheat, sunflower oil and other agricultural products that pushed food prices up.

Many expect the inflation data is likely to lead the Federal Reserve on track to increase interest rates by 0.75 percentage point at its meeting in November. The Fed has already raised interest by that percentage in its last three meetings.

While prices soar, new data show that jobless claims have gone up last week. The Labor Department said Thursday that in the week ending Oct 8, the seasonally adjusted unemployment claims were 228,000, an increase of 9,000 from the previous week.

The four-week moving average of unemployment claims was 211,500, an increase of 5,000 from the previous week's average.

Another government report last week showed that the number of available jobs in the US dropped in August compared to July.