Here Are The Areas Weighing Heavier On Your Wallet As Inflation Persists

Here Are The Areas Weighing Heavier On Your Wallet As Inflation Persists

Though year-over-year inflation declined last month, a closer look at the data shows that many of the costs households experience on a daily basis are still increasing.

Price levels rose 7.7% between October 2021 and October 2022, according to a Thursday report from the Bureau of Labor Statistics, indicating that inflation has begun to slow amid contractionary policy from the Federal Reserve. The month-to-month increase of 0.4% was below analysts’ forecasts, while the 0.3% increase in core inflation, which factors out the more volatile food and energy categories, was likewise lower than expected.

The lower headline number was driven by declines in areas such as used vehicles, apparel, and medical care services, which have a lower day-to-day impact upon consumers. Overall food prices rose 0.6% while energy prices rose 1.8%, the first such increase since June. Shelter costs rose 0.8%, marking their fastest increase since the beginning of the year.

“The pervasiveness of price increases remains problematic,” Bankrate Chief Financial Analyst Greg McBride said in a statement provided to The Daily Wire. “In categories that are necessities — shelter, food, and energy — we continue to see large and consistent increases. The areas posting declines are for the most part either irregular or more discretionary in nature — airfare, used cars, and apparel.”

Markets rallied on Thursday in reaction to the inflation report, with the Dow Jones rising 1,036 points, or 3.2%, and the S&P 500 rising 176 points, or 4.7%. McBride added that if the most recent inflation news “constitutes improvement,” market actors have “set a very low bar.”

“Any meaningful relief for household budgets is still somewhere over the horizon,” he continued. “Inflation has run far hotter for far longer than expected and we have yet to string together any kind of winning streak… there is plenty of opportunity for further disappointment.”

The decrease in year-over-year inflation last month occurred before the Federal Reserve raised the target federal funds rate by 0.75% for the fourth consecutive time, representing the most aggressive contractionary monetary policy efforts in decades. Some economists have contended that central bankers are overreacting in their push to decrease inflation as a reaction to their dovish leanings after the lockdown-induced recession, through which policymakers maintained near-zero interest rates and purchased government bonds from the markets.

President Joe Biden also lauded the lower headline inflation reading, claiming that the report “shows a much-needed break” in rising price levels. “Today’s report shows that we are making progress on bringing inflation down, without giving up all of the progress we have made on economic growth and job creation,” he said in a statement from the White House. “My economic plan is showing results, and the American people can see that we are facing global economic challenges from a position of strength.”

The commander-in-chief did not mention the rise in energy costs and downplayed the reality of soaring grocery prices, claiming that the report “shows a much-needed break in inflation at the grocery store as we head into the holidays.”

Most projections show that Republicans are likely to take a slim majority in the House of Representatives, while control of the Senate is yet to be determined. Biden therefore told lawmakers that he will “oppose any effort” to undo his agenda.