In Brief
Prices of imported goods have increased due to Donald Trump's trade tariffs.
There has been an increase in the prices of consumer goods, electronics, and clothing.
Although energy prices remain stable, there is slight inflation in food grains and household items.
The impact of the heavy import duties imposed by US President Donald Trump is now becoming significantly visible. Due to the increase in prices of some imported goods in the US, retail inflation remained high in September as well. The US Department of Labor released the monthly inflation data on Friday. According to the statistics, consumer prices in September increased by 3% compared to the previous year, while in August of the same year, consumer prices had increased by 2.9%. Excluding fluctuations in the food and energy categories, core inflation remained at 3%, which is lower than the 3.1% in August.
Inflation is much higher than the Federal Reserve's 2% target
Both these figures are much higher than the American central bank Federal Reserve's 2% inflation target. Due to the lack of financial provisions, the government shutdown has delayed the release of inflation data based on the consumer price index by more than a week. The Trump administration has recalled some employees from the labor department to prepare these figures. These figures are lower than many economists' expectations, and therefore, the Federal Reserve may reduce its key interest rates for the second time this year at the meeting next week.
The US Federal Reserve cut interest rates in September
Last month, the US Federal Reserve reduced interest rates by 0.25 percent, marking the first cut since December of last year. Considering the rising unemployment and inflation in the US, the Federal Reserve announced a reduction of 25 basis points, or 0.25 percent, in key interest rates. It should be noted that jobs in the US are weakening.
In August, only 22,000 jobs were added in the US. This latest inflation report comes at a time when several surveys have shown that most Americans believe their monthly expenses have increased by $100 to $749 compared to last year. Due to Donald Trump's trade policies, retail inflation in the US is back on the rise. In September, the consumer inflation rate reached 3%, which is higher than in August. Import tariffs have particularly increased the prices of electronics, clothing, and everyday consumer goods. Experts say that this increase could impact the purchasing power of American consumers and the Federal Reserve's future interest rate decisions.