The latest inflation reading shows prices rose 5.4% on an annualized basis in September, with supply chain bottlenecks, labor shortages and high demand making prices climb, according to data released Wednesday by the Bureau of Labor Statistics.
The inflation rate rose 0.4% seasonally adjusted in September from August, according to the latest consumer price index. This is well below the 0.9% seen in June, but not enough to indicate a slowdown in inflation.
Increases in food and shelter accounted for more than half of the increase in the index, with food increasing 0.9 percent. Gasoline increased 3.9% and new vehicles 1.3%.
Clothing fell 1.1% and transportation services fell 0.5%.
The “transitional effects” of inflation that Federal Reserve Chairman Jerome Powell has spoken of may last a little longer.
Consumers were faced with high sticker labels on everything from lumber and menu prices to used cars, as vendors hiked prices to fend off increased demand and pass on increased costs. as pandemic economic disruptions continue to disrupt global economies. Covid-19 issues and labor shortages have led to backups at every pinch point in the supply chain, from production and offloading to trucking and off-shelf storage.
And consumers who switch from entertainment, leisure and travel expenses to goods have increased demand just as the system is under increased pressure.
But shoppers shouldn’t be worried that there aren’t enough gifts to fill store shelves for Christmas and the holidays, Treasury Secretary Janet Yellen said in an interview with CBS that aired Tuesday night.
“There could be isolated shortages of goods and services in the coming months,” Yellen said. “But there is a plentiful supply of goods. I think there is no reason for consumers to panic about the lack of goods they will want to buy this Christmas.”
The question is whether there is the manpower to unload these items and truck them to stores.
President Joe Biden is expected to announce new plans on Wednesday to help ease pressure at ports, which have been backed for months by lines of container ships awaiting unloading.
Walmart, FedEx and UPS will operate 24/7 and longshoremen will provide additional crews to expedite the processing of container ships at two west coast ports, the White House said.
Experts say that once the supply chain issues are resolved, the pricing pressures should ease.