about 2 months ago • 1 min
What’s going on here?
Inflation nudged up by a more-than-expected 0.4% in September, as rent prices settled into a much more premium location.
What does this mean?
Temperatures might be cooling down in many countries as summer evenings turn into winter nights, but not in the US. Well, at least as far as inflation’s concerned. Prices were 0.4% higher in September than August, locking them in at 3.7% hotter than the same time last year. But at least that’s moving in the right direction, clocking in slightly below August’s 0.6% increase. And when you remove volatile food and energy prices from the mix, the resulting “core inflation” rose 0.3% – bang in line with analysts’ forecasts.
Why should I care?
Zooming in: Renting is rough.
Shelter costs like rent and mortgages were responsible for around 70% of core inflation’s rise. Now, those types of costs bleed into inflation with a lag. Landlords, for one example, need to wait until leases are up for renewal before hiking up rents. And with mortgage rates still on the up across the US, we may see a slow but steady climb for months to come, at least.
The bigger picture: High price tags look like a steal.
Not to sound all doom and gloom, but those rent rises aren’t the only issue we’re up against. Motor insurance is 20% more expensive than the same time last year, although that’s partly due to a supply shortage of cars. And when prices in general are higher than usual, shoppers are actually tempted to stock up in case everything gets more expensive going forward. That demand ramps up prices a little bit extra, making it harder for central banks to tame runaway inflation.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.
/3 • Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.