Inflation At 2.4%: Because Who Needs a Paycheck When You Can Have A Nice Surprise?

In a stunning twist of fate — or just a plain old Tuesday — the prices of goods in the U.S. have decided to rise faster than our collective hopes for economic recovery. Yes, according to the Labor Department (who we see every month for a little inflation drama), September had a price increase hotter than a jalapeño pepper in a sauna, clocking in at a seasonally adjusted 0.2%. This raises our annual inflation rate to a crisp 2.4%. Talk about putting the ‘fun’ in funding — especially since we were only expected to hit a low-key 2.3%.

But don’t break out the confetti just yet! Our inflation rate has actually dropped by 0.1 percentage point since August – a minor victory in the endless marathon towards financial wellness. Just when you thought inflation was wearing out its welcome, it plops down for an extended stay on your wallet.

Now, excluding the essentials like food and energy — because who needs those pesky necessities anyway? — core prices surged 0.3% in September, leading to an annual rate of 3.3%. Core inflation is like that friend who always crashes at your place but never contributes to rent. Just lovely.

In unrelated news—well, unless you consider jobless claims to be related to the welfare of the economy—unexpectedly high numbers emerged from the fallout of Hurricane Helene and a Boeing strike. It turns out that while the winds of fate were swirling in the Southeast, the labor market decided to take a nap, resulting in a 14-month high for weekly jobless claims. Maybe a little too much wind in their sails—or just a case of ‘let’s see how high we can go?’, right?

Most of the inflation, it appears, can be attributed to a high-flying food price increase of 0.4% alongside rising shelter costs. It’s almost as if food and rent have teamed up against our budgets, while energy prices took a vacation and fell by 1.9%. I guess they couldn’t handle the pressure.

Meanwhile, the stock market futures took a dive after this enlightening information, because who doesn’t love a rollercoaster of emotions when checking their investments? And Treasury yields? Well, they gave us a nice mix, because why should any data set ever show consistency?

The Federal Reserve, bottling the ever-elusive confidence of a magician pulling a rabbit out of a hat, has started to drop interest rates. They’ve gazed into their crystal ball and, apparently, saw a future for themselves after a half-percentage-point clip in September. Promises are teetering on continuing to cut rates, regardless of what “rates” means in 2023 anyway—all bets are off, folks!

In a live demonstration of the psychological gymnastics practiced by every central banker, Chicago Fed President Austan Goolsbee assured everyone that consistency is key, and we shouldn’t obsess over erratic, day-to-day figures that don’t seem to line up. If we only look at the long-term, we’re on the right path—even if it feels more like walking through mud at times.

But don’t let that long-term optimism fool you; jobless claims decided to raise their hand and say, “Hey! We’re up 258,000, thanks to the hurricane and a little strike drama!” Because what better time to sit on the sidelines than during a hurricane and amid labor disputes?

And surprise, surprise! Eggs are up 39.6% over the past year; they’re apparently the ninjas of the food world, sneaking up on consumers when they least expect it. Butter, as always, is just trying to keep up with the inflation race — a noble effort given its current track record. Meanwhile, our lovely shelter costs have risen 4.9% year over year, making sure we all feel like we’re ‘home sweet home.’