U.S. inflation may return to 40-year high as housing costs rise

The United States is scheduled to announce the September consumer price index report on the 13th. Economists currently expect the U.S. core inflation measure (CPI) to return to a 40-year high in September, as rents and house prices are hard to contain.

Economists predict that the US core consumer price index, which excludes food and energy prices, is expected to rise 0.4% in September from the previous month and 6.5% from the same period last year, matching the 40-year high since 1982 set in March this year. About a third of economists interviewed by Bloomberg expected the core CPI reading to reach 6.6% or higher.

The report will also show the significant impact of housing prices on inflation. Housing prices account for about 1/3 of the overall CPI, and a larger proportion in the core CPI. Rising rents and home prices over the past two years have slowly weighed on the Labor Department’s CPI data. U.S. rents and home prices both rose 0.7% in August, the largest annual increase since 1986. Economists expect both indicators to rise another 0.7% in September. The study predicts that annual price growth in the main housing category will not peak until late in the second half of next year.

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