Unstoppable US Inflation... 5.9% Pension Increase Amid Supply Chain Collapse

September CPI Rises 5.4%
Food and Fuel Prices Increase Pressure
Labor Shortages, Wage Hikes, and Logistics Crisis Lead to Corporate Price Increases
Retiree Pension Payments Up 5.9% Amid Soaring Inflation
White House Takes Supply Chain Improvement Measures, Effectiveness in Question

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Inflation in the United States continues to soar. As supply chain bottlenecks worsen, the main drivers of inflation have shifted to fuel and food, raising concerns about the limitations of the U.S. government's response.

On the 13th (local time), the U.S. Department of Labor announced that the Consumer Price Index (CPI) for September rose 5.4% compared to the same month last year. The September CPI increase was larger than August's 5.3% and also exceeded market expectations of 5.3%.

The CPI recorded 5.4% in June and July, appeared to ease slightly in August, but reversed to rise again. The CPI has risen to its highest level since 2008.

The month-over-month CPI increase was also 0.4%, higher than both the previous month and the market expectation of 0.3%. The monthly increase rate has shown signs of easing compared to earlier in the year, when it reached as high as 0.9% in June.

Core CPI, which excludes the volatile energy and food sectors, rose 4.0% year-over-year and 0.2% month-over-month. The core CPI matched market expectations.

This indicates that fuel and food had a significant impact on inflation. Gasoline and grocery prices rose 1.2% each compared to the previous month, leading the consumer price increase.

Used car prices, which had been a major contributor to inflationary pressure, fell 0.7% month-over-month for the second consecutive month, but rising energy and food prices continue to fuel overall inflation.

The Wall Street Journal (WSJ) assessed that supply chain issues continue to drive price increases. Labor shortages are also interpreted as a factor contributing to inflation.

The rise in inflation has also increased Social Security benefits in the U.S. According to CNN, retirement pensions paid by the government will increase by 5.9% next year, raising the average monthly payment to $1,657. This is the largest increase in 40 years. This year's increase was 1.3%, and the average increase over the past 12 years has been 1.4%.

The American Association of Retired Persons expressed concern that despite the increase in pension benefits, retirees are suffering as prices continue to soar.

Despite the spread of the Delta variant and supply chain problems, consumer spending is rising, and labor shortages are pushing wages up, which is seen as fueling inflationary pressures.

Many companies are raising prices due to soaring transportation costs, labor costs, and raw material prices. The National Federation of Independent Business announced that about 46% of small businesses planned to raise prices over the next three months as of September.

The White House maintains that price increases are still temporary but recognizes the severity of inflationary pressures caused by supply chain issues and has taken action.

According to the White House, President Joe Biden held a meeting with industry representatives on the day and is expected to announce measures to resolve logistics bottlenecks, including congestion at the ports of Long Beach and Los Angeles.

A senior White House official said, "With a shortage of truck drivers, the role of rail freight has become important," explaining that railroads will be actively utilized.

Professor Son Seong-won of Loyola Marymount University stated, "Supply chain bottlenecks are worsening. Despite the White House's intervention, it does not seem that the bottlenecks will ease anytime soon," arguing that inflation is not temporary. Professor Son explained that wages are rising due to labor shortages, and consumers, having increased savings through government stimulus measures, are not hesitant to accept price hikes by companies.

Meanwhile, although the rise in inflation was reconfirmed, the yield on the U.S. 10-year Treasury note fell by 0.03 percentage points to 1.551% on the day.

This content was produced with the assistance of AI translation services.