US consumer prices up slightly; jobless claims surge
US CONSUMER prices rose slightly more than expected in September, but the annual increase in inflation was the smallest in more than 3½ years, potentially keeping the Federal Reserve on track to cut interest rates again next month.
The number of Americans filing new applications for unemployment benefits surged last week, partially boosted by Hurricane Helene and furloughs at Boeing amid a nearly four-week-old strike at the US planemaker.
The consumer price index (CPI) increased 0.2 per cent last month after gaining 0.2 per cent in August, the Labor Department’s Bureau of Labor Statistics said on Thursday (Oct 10). In the 12 months to September, the CPI climbed 2.4 per cent. That was the smallest year-on-year rise since February 2021, and followed a 2.5 per cent advance in August.
Economists polled by Reuters had forecast the CPI edging up 0.1 per cent and rising 2.3 per cent year on year. The annual increase in inflation has slowed from a peak of 9.1 per cent in June 2022.
Together with a significant moderation in the inflation measures tracked by the US central bank for its 2 per cent target, that allowed the Fed to shift focus to the labour market and deliver an unusually large 50-basis-point rate cut in September.
Excluding the volatile food and energy components, the CPI increased 0.3 per cent in September after rising 0.3 per cent in August. In the 12 months to September, the so-called core CPI advanced 3.3 per cent. That followed a 3.2 per cent gain in August.
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Initial claims for state unemployment benefits increased 33,000 last week to a seasonally adjusted 258,000 for the week ended Oct 5, the Labor Department said on Thursday.
Economists polled by Reuters had forecast 230,000 claims for the latest week. There were large increases in unadjusted claims in North Carolina and Florida, and claims also rose in Washington state. Hurricane Helene, which tore through Florida and devastated large swathes of the US south-east in late September, is likely to continue distorting claims data in the weeks ahead.
The labour market’s short-term outlook is also likely to be distorted by Hurricane Milton, which barrelled through Florida on Thursday, whipping up deadly tornadoes, destroying homes and knocking out power.
SEE ALSO
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 42,000 to a seasonally adjusted 1.861 million during the week ending Sep 28, the claims report showed.
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