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U.S. inflation saw its biggest monthly increase since May, with both overall inflation and core inflation in September rising more than expected. Core inflation over the past three months has run at an annualized pace well above 3%, which Heather Long described as problematic. She also noted that the 3.7% inflation rate is entirely offsetting recent wage gains.
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Heather Long previously examined the drivers behind higher bond yields in the U.S. and France, expressing skepticism that strong growth was responsible in a recent report. She also noted that consumption has returned as the main engine for U.S. economic growth following a period of increased AI investment, as detailed in another article. These earlier observations provide context for the current discussion on inflation and wage gains.