US issues bleak economic data

The nation’s key gauge of consumer prices has risen to a four-decade high, official data shows

The core US consumer price index (CPI), which excludes food and energy, rose 6.6% in the year through September, marking its highest level since 1982, the Bureau of Labor Statistics reports.

Data released on Thursday shows that the overall CPI rose 0.4% in September compared to August, twice the 0.2% projected by analysts even as the annual rate slowed slightly to 8.2% from 8.3%.

The core index is viewed as a better tracker of underlying inflation pressures, since food and energy costs can whipsaw from month to month.

The report indicated that gas and food inflation has generally eased up from levels seen earlier this year. Meanwhile shelter costs led the way, with the related index climbing 0.7% through the month.

Transportation services saw prices jump 1.9% last month, notching the largest one-month increase across core CPI components. They were followed by rising costs for medical services.

Economists say the report signals that inflation is a persistent problem even amid large interest-rate hikes from the US Federal Reserve. It will determine how further the regulator will push with its aggressive tightening and keep rates high until there are signs that inflation is cooling off.

US stocks briefly nosedived following the inflation report but later recovered from the early-session drops.

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