On The Money — Inflation rises again

Sylvan Lane
·5 min read

Consumer prices rose faster than expected for the second consecutive month. We’ll also look at five things to know about a major boost to Social Security and how oil production cuts could tank the global economy.

But first, there is a national Adderall shortage.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

Inflation, consumer prices sped up in September

Consumer prices rose at a faster pace than expected in September as inflation accelerated for the second straight month, according to data released Thursday by the Labor Department.

  • The consumer price index (CPI), which measures inflation, rose 0.4 percent in September and 8.2 percent over the past 12 months, according to the Bureau of Labor Statistics (BLS).  

  • Economists expected prices to rise roughly 0.3 percent last month and
    8.1 percent over the past year.

The background: The BLS pinned the September boost to inflation on rising shelter, food and medical care prices, which overwhelmed a 4.9 percent drop last month in gasoline prices. Without food and energy products, which tend to be more volatile in price, consumer prices rose 0.6 percent.

“The Fed is trying to get inflation under control, but you wouldn’t know that looking at today’s CPI data,” said John Leer, chief economist at Morning Consult.

“While energy prices are falling, services inflation in shelter and transportation is running hot, forcing consumers to make tough spending decisions through year-end.”

Sylvan breaks it down here.

COLA COUNTDOWN

Five things to know about today’s Social Security COLA 

Social Security payments will increase by an average of $140 per check as the national pension plan is set to receive its biggest cost-of-living adjustment (COLA) in 40 years.

The hike came in at 8.7 percent, an attempt to close the gap caused by inflation that reached as high as 9.1 percent in June before tapering off slightly over the summer. Between 2010 and 2020, Social Security COLAs averaged just 1.7 percent.

  • The COLA is especially important amid stock market declines, which are hitting seniors’ retirement accounts at the wrong time. 

  • Millions of children in the U.S. with retired or deceased parents also receive Social Security benefits each month.  

  • It’s coupled with a drop in the price of premiums for Medicare Part B, which covers seniors’ hospital and doctor visits.

Tobias Burns has more here.

ENERGY CRISIS?

OPEC+ cuts could be ‘tipping point’ for recession, global energy agency warns

Oil supply cuts from a group of nations known as OPEC+ may be the “tipping point” for a global economy nearing recession, warned the International Energy Agency (IEA).

“With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession,” the organization said in its new oil market report.

  • The IEA said in its new report, however, that supply will likely be reduced by less than the full 2 million barrel cut announced by the group of oil producers.  

  • That’s because most members of OPEC+ have already failed to meet their production targets.

Rachel Frazin has the details.

CRYPTO REGULATION

Hickenlooper calls for crypto securities rules from SEC

Sen. John Hickenlooper (D-Colo.) is urging the Securities and Exchanges Commission (SEC) to issue regulations for digital asset securities through a transparent notice-and-comment regulatory process.

In a letter sent to the SEC on Thursday, Hickenlooper wrote that existing laws and regulations do not apply to how crypto assets are being used on the market.

  • The lawmaker asked the agency to clarify what types of digital assets are securities, address how to issue and list digital securities, establish a registration service for digital asset security trading platforms, set regulations on how trading and custody of digital assets should be carried out, and determine what disclosures are required for potential investors to be informed about. 

  • His letter comes a week after the SEC announced that it reached a
    $1.26 million settlement with celebrity entrepreneur Kim Kardashian for promoting a cryptocurrency service while not disclosing to the agency that the company paid her for the promotion.

The Hill’s Olafimihan Oshin digs into this here.

Good to Know

Rents increased fastest in Oklahoma City in September, where the asking rent rose 24 percent year-over-year even as the nationwide rental market continues to slow, according to a new analysis.

The analysis from the real estate company Redfin found that while median asking rents increased by 9 percent nationwide in the last year to $2,002 per month, they are also slowing significantly. September marks the fourth straight month where the growth in what is asked for rent decelerated.

Other items we’re keeping an eye on:

  • The Biden administration on Thursday extended the nation’s COVID-19 public health emergency for the next 90 days as officials brace for a potential surge of infections over the winter.

  • The Environmental Protection Agency (EPA) said Louisiana may have discriminated against Black communities who live near air pollution sources in the state.

  • Meta filed a motion Thursday asking a court to dismiss a Federal Trade Commission (FTC) lawsuit seeking to block the tech company’s acquisition of the virtual reality (VR) company Within Unlimited.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.

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