US inflation is on the rise again

Vishala Sri-Pathma (0:00)

How are Americans coping with higher prices?

Alan Eden (0:04)

If tariffs would ease, that would definitely calm things down a little bit. There's just so much unrest everywhere around the world. It would be nice if that would all go away.

Vishala Sri-Pathma (0:12)

It's World Business Report from the BBC World Service. I'm Vishala Sri-Pathma. On the way, prices are climbing faster than expected in the US. But who's picking up the bill? Plus, a very big birthday in the 100-acre wood. Winnie the Pooh turns 100 We take a look at why the old bear is such a money spinner.

So a day of high price headlines.

Rachel Scott (0:42)

I'm Rachel Scott from ABC News. It is Wednesday, October 14th. This is what you need to know.

The cost of living continues to climb just three weeks before election day.

SPEAKER_4 (0:52)

Welcome back, everybody, breaking right now that brand new report showing inflation ticked up in the month of September.

Alan Eden (0:59)

We're back with some breaking economic data.

SPEAKER_5 (1:00)

Inflation rose by 3.7% in September year over year and 0.6% month over month.

Vishala Sri-Pathma (1:08)

Say some broadcast headlines from across the United States. Not the inflation numbers the White House would have wanted just before the midterm elections. US inflation rose more than expected to 3.7% in September. And for voters, of course, this comes down to what they're actually feeling in their wallets. Here are some Trump supporters in Ohio this week.

SPEAKER_6 (1:31)

So far, he's done everything he said he's going to do, like no tax on tips and all that stuff. But what he could do better is bring prices down, bring fuel prices down.

SPEAKER_7 (1:43)

So, yeah, gas prices affect me a bunch.

I own a pizza shop. I've got delivery boys. Everything that we eat, you know, cheese, flour, boxes, you name it, it can go up. I think, you know, gas prices make everybody kind of feel the squeeze a little bit.

Vishala Sri-Pathma (1:59)

So people really feeling the pinch there in the United States, they were Trump supporters in Ohio this week that the BBC spoke to. Well, the BBC's North America business correspondent, Samara Hussain, explained to me what's driving the higher prices.

Samara Hussain (2:14)

Right, so on the one hand, you see that food didn't actually change month over month. So that's good. But on the other hand, you see just how significant the increases in gasoline prices are in America. So in just one month, a gallon of gasoline or a liter of gasoline is up by 9%. And then when you look at the entire year, so from the beginning of the year up until now, we see that gasoline prices have jumped almost 35%.

If there was any economic indicator that was clearest in demonstrating the cost of the Iran war on the American people, it would certainly be this latest report.

Vishala Sri-Pathma (2:58)

And we've got the interest rate decision coming up in a couple of weeks. And six days after that decision, we have the midterms in the US. So it's interesting timing there for the White House.

A lot of experts are saying that the US Federal Reserve will be closely watching to see if energy costs begin to affect other areas of the economy, as you alluded to. So food prices, for example, that would drive inflation higher.

Samara Hussain (3:23)

Well, energy prices are driving inflation. Now, remember, I'm talking strictly about gasoline. So what people put into their cars, that was the biggest driver for the increases to inflation in this last month. But overall, there is no question that energy prices have played a significant role in how much more expensive everything is getting. Because you're not just talking about the actual energy to heat your homes, but we're talking about the diesel that goes into tractor combines that run to be able to farm corn or whatever foodstuffs that are necessary. And so you're already seeing that kind of increase happening in food prices, for example. So the impact is just absolutely wide-ranging. But to your point about the Federal Reserve, right, so there's the big question. The Fed has already indicated that they're probably going to raise rates one more time before the end of the year. So there's two meetings left, one in October, one in December. Now a lot of people were betting on it being December. Now there's a question about whether or not there's going to be a rate rise in October.

But if you are the current chair of the Federal Reserve, handpicked by Donald Trump, and knowing that this next meeting is just days before a midterm election, even though the Federal Reserve is supposed to operate outside of politics, one can't help but wonder if some politics is going to play into that decision.