Core US inflation climbs to 40-year high

US consumer prices advanced more than expected last September, underscoring forecasts that the Federal Reserve would continue to raise interest rates in order to tame inflation.

Data released by the US Bureau of Labor Statistics today, Oct. 13, showed that the broader headline Consumer Price Index (CPI) measure surged year-on-year (YoY) by 8.2% in September, exceeding the projected 8.1% uptick, albeit slowing from August's 8.3% rate.

The core CPI, which strips out volatile food and energy prices, saw a 6.6% YoY hike in September, marking the fastest price growth since 1982. The core index also rose 0.6% month-on-month (MoM), surpassing the average estimate of a 0.4% jump.

The report reinforces the possibility that the Fed would decide on an additional 75-basis-point (bp) interest-rate increase at the coming monetary policy meeting in November. This is particularly after last week’s US jobs report indicated the resilience of the labor market in the face of tightening policy.