Hello, Scott. NPR’s Scott Horsley is currently joining us. However, it is anticipated that the Federal Reserve will maintain interest rates at a constant level during their upcoming meeting. This represents the largest rise in a year that we have witnessed throughout the entire summer. According to the Labor Department, the general living expenses in August showed a 3.6% increase compared to the previous year. Inflation slightly accelerated last month, primarily due to the surging gas prices.
Hi, Ailsa. This is Scott Horsley reporting.
Should we be concerned about how high it is currently? However, two times in a row it has gone up, right? Yes, inflation was increasing for most of last year, so it’s understandable: CHANGE.
In the future, drivers may start to see some relief at the gas pump, but Preston Caldwell, the chief U.S. Economist at Morningstar, believes that gas prices may continue to climb. We know that gas prices can bounce up and down, but it’s possible that this could be a big deal. As gas prices rise, the monthly cost of living may increase by more than half. It’s important to note that this jump in prices accounted for more than half of last month’s cost of living. So, it’s not something you want to see, but it’s worth considering: it’s a big deal.
In my opinion, it should move in the opposite direction thereafter. However, following that, maybe we will witness another month or two of increasing influence on energy costs. Caldwell: PRESTON
In response to Russia’s invasion of Ukraine, the United States imposed sanctions last June at their highest level and significantly lower than the previous year. Despite this, gas prices remain lower than they were. HORSLEY.
CHANG: Correct. Alright, and what is occurring with the prices of other things?
Over the past year, there has been a general increase in inflation, particularly in prices of food and energy components, which surpasses what Caldwell suggests. The rise in airfares was mainly due to higher fuel costs for jets. Airfares went up after falling in July and June. Hotel room rates decreased last month. Rent is still increasing, although not as quickly. You should be aware that it’s a combination of various things.
I believe that they have likely finished hiking for the remainder of this year. The Federal Reserve will not increase interest rates during its upcoming meeting, which suggests that core inflation is expected to revert back to its usual levels.
Additionally, towards the end of the year, it is possible that there might be another increase in interest rates, although considering that inflation is still significantly higher than the Federal Reserve’s desired rate of 2%, the majority of financial markets agree with this prediction, particularly in regards to the upcoming meeting next week. HORSLEY also supports this viewpoint.
CHANG: Hmm. Well, I understand that one place people are truly encountering this surge in prices is auto insurance. What is occurring in that domain?
Harvey Rosenfield, a consumer watchdog in California, has asked drivers to have auto insurance because rising insurance premiums are a challenge for most car owners in the states. Not only have we seen more serious accidents and damage from natural disasters, but it also costs more to replace or repair a car these days. This is partly a byproduct of inflationary forces, and prices are up more than 19% this year. Yeah, auto insurance has been a big mover.
As a policyholder, it is important to ensure that insurers have accurately evaluated your circumstances. Since insurance companies vary in their pricing, the first step you should take is to compare different options as there are often more favorable offers available. Unfortunately, there is not much comfort in this, I must say, according to Harvey Rosenfield.
There is definitely a compromise on privacy in that situation. Certain insurance firms may offer a reduced rate if you install a mobile application that allows them to monitor your driving behavior, you are aware.
CHANG: Yeah.
In the event of a prolonged strike against the Detroit car manufacturers, it is possible that there will be an increase in new vehicle prices. Although used car prices decreased last month, new car prices experienced a rise once again. It is often advantageous to combine your home and automobile insurance policies. Fortunately, there is some positive information available.