(NEXSTAR) – Inflation in the U.S. accelerated in September, the latest data from the Labor Department show. It has kept the costs of housing and everyday needs high and ensures the Federal Reserve will raise interest rates, likely aggressively.
Though consumer prices, excluding volatile food and energy costs, jumped 6.6% in September from a year ago — the fastest such pace in four decades — some expenditures are cheaper than they were during the same time last year.
In grocery stores, where the prices of many items have increased by 10% to 20% year over year, uncooked beef steaks are down nearly 5%. Uncooked beef roasts have seen prices drop about 2.8%. The costs of fresh vegetables are, overall, up roughly 9% but tomatoes are down 1% since last year.
Some entertainment and recreation expenditures have seen a price decline as well.
Prices on smartphones have taken the deepest dip, dropping 21% since last year. Televisions are close behind, dipping by nearly 18%. Among personal computers and smart home assistants, prices are down about 3.6%.
Outside of the home, admission to sporting events is down 9.5%.
The cost of many of the items outlined by the Labor Department are also starting to decline, based on month-to-month data. That includes breakfast cereals, ground beef, eggs, milk, coffee, butter, gasoline, furniture, and used vehicles. A key factor is that supply chain snarls have eased, and many large retailers such as Walmart and Target have discounted some items to clear excess stockpiles.
Still, declining prices across some expenditures don’t diminish the pressure of rising inflation.
“We still have no evidence that inflation is decelerating,” said Matthew Luzzetti, an economist at Deutsche Bank. “Let alone the clear and convincing evidence that the Fed is looking for.”
Inflation has swollen families’ grocery bills, rents, and utility costs, among other expenses, causing hardships for many and deepening pessimism about the economy despite strong job growth and historically low unemployment.
The September inflation numbers essentially guarantee that the Fed will raise its key short-term rate by three-quarters of a point for a fourth straight time when it next meets in early November. The Fed has already raised its key short-term rate by 3 percentage points since March, the fastest pace of hikes since the early 1980s. Those increases are intended to raise borrowing costs for mortgages, auto loans, and business loans and cool inflation by slowing the economy.
At their last meeting in late September, Fed officials had projected that by early next year, they would raise their key rate to roughly 4.5%, which would be the highest level in 14 years. Some economists now predict that the Fed will have to boost rates even higher to defeat what appears to be an entrenched bout of inflation. The risk is that such higher borrowing costs would push the economy into recession.
Until consumer demand slows further, forcing more companies to compete on price, costs for many goods will likely stay high, economists say.
“There’s a saying in economics that prices go up like rockets and down like feathers,” said Eric Swanson, a former Fed economist who is now a professor at the University of California, Irvine. “You’re kind of seeing that a little bit.”
The Associated Press contributed to this report.