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<ul class="summary-list"><li>Inflation accelerated as expected in October.</li><li>The consumer price index increased 2.6% from October 2023, matching the forecast.</li></ul>As expected by economic forecasters, inflation heated up in October.The consumer price index sped up as expected to a 2.6% year-over-year growth rate in October from <a target="_blank" class="" href="https://www.businessinsider.com/inflation-september-cpi-consumer-price-index-federal-reserve-interest-rates-2024-10">September's rate of 2.4%</a>.Inflation had been cooling down for most of 2024. Before the latest reading, the last uptick in the headline year-over-year rate was in March.Core CPI, which excludes volatile food and energy prices, rose 3.3% in October from a year ago, matching the forecast and the previous year-over-year increase.The Federal Reserve will likely want to see signs of inflation continuing to come down to its 2% target as Federal Open Market Committee members decide whether to continue cutting interest rates. There are still a lot of data releases to come out before the year's final scheduled FOMC meeting in December, including further reports for inflation measures like the CPI.The Fed decided in its November meeting to <a target="_blank" class="" href="https://www.businessinsider.com/federal-reserve-cuts-interest-rates-quarter-point-powell-inflation-election-2024-11">cut interest rates by 25 basis points</a>, which was largely expected and smaller than <a target="_blank" class="" href="https://www.businessinsider.com/fed-cuts-interest-rates-how-much-september-fomc-powell-inflation-2024-9">September's 50-basis-point cut</a>.Before the latest CPI report, <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch</a> showed investors were assigning around a 60% probability to a 25-basis-point cut in December. After the CPI news release, that increased to around 70%.November's jobs report, to be published in early December, will also help Americans and the Fed better understand the labor market in the fall after employment readings in <a target="_blank" class="" href="https://www.businessinsider.com/october-jobs-report-unemployment-rate-nonfarm-payroll-growth-federal-reserve-2024-11">October</a> were surprisingly weak amid hurricanes and strikes."We're trying to be on a middle path where we can maintain the strength in the labor market while also enabling further progress on inflation," Fed chair Jerome Powell said at a press conference on November 7.This is a developing story. Please check back for updates.

Inflation heated up in October as expected

<ul class="summary-list"><li>President-elect Donald Trump said he would implement tariffs on imported goods.</li><li>Economists said the proposals could boost inflation and raise prices for consumers.</li></ul>One of the first policies President-elect <a target="_blank" class="" href="https://www.businessinsider.com/election-results-trump-harris-presidential-election-2024-11">Donald Trump</a> is expected to enact after being sworn into office is imposing <a target="_blank" class="" href="https://www.businessinsider.com/cost-expensive-goods-price-impact-presidential-election-scenarios-trump-harris-2024-10#imported-goods">taxes on imported goods</a>.Many economists say these tariffs, as well as some of his other proposals, could kick-start another bout of inflation and interest-rate hikes.Trump has said that his proposals would not impact US prices. "I am going to put tariffs on other countries coming into our country, and that has nothing to do with taxes to us. That is a tax on another country," he said in an August speech.Some experts have argued <a target="_blank" class="" href="https://www.businessinsider.com/trump-tax-plan-tarriffs-benefits-top-earners-study-2024-10">otherwise</a>. Economists and investors project that taxes imposed on imports will be passed on to American consumers in the form of higher prices. In an economic chain reaction, households would then pay higher interest rates on borrowing of all kinds as the Fed moves to tame that newly rekindled inflation.<h2 id="28eee089-e5e3-42d1-bc61-18122840af26">Ramping up tariffs from Trump's first term is expected to eat into Americans' wallets</h2>On the campaign trail, one of Trump's cornerstone proposals was a 60% <a target="_blank" class="" href="https://www.businessinsider.com/where-does-trump-vance-stand-on-china-tariffs-inflation-taxes-2024-7">tariff</a> on goods imported from China and a 10% to 20% tariff on imports from other countries.The US Census Bureau reported that broad tariffs would likely affect the prices of automobiles, drugs for human and veterinary use, food and beverages, furniture, and household appliances.Trump could announce these changes as soon as he takes office because they would not require congressional approval, but because implementation could take time, consumers would not see higher prices immediately.An <a target="_blank" class="" href="https://www.piie.com/sites/default/files/2024-09/wp24-20.pdf">analysis</a> from the nonpartisan Peterson Institute examined Trump's proposed 60% tariff on goods imported from China and estimated that it would boost inflation by 0.4 percentage points in 2025. The estimate does not include Trump's proposal for a 10% to 20% tariff on other imports.Markets are also <a target="_blank" class="" href="https://markets.businessinsider.com/news/bonds/surging-treasury-yields-after-trump-win-show-borrowers-may-not-get-relief-2024-11">expecting higher inflation</a> under Trump; bond yields surged following Trump's victory. That led to the 30-year fixed mortgage rate rising, meaning homebuyers are on track to see higher interest rates on loans.An <a target="_blank" class="" href="https://taxpolicycenter.org/taxvox/tpc-trump-tariffs-would-raise-household-taxes-and-slow-imports">analysis</a> by the nonpartisan Tax Policy Center found that Trump's policies would decrease posttax incomes by an average of $1,800 in 2025. A separate <a target="_blank" class="" href="https://www.americanprogressaction.org/article/trumps-tariff-would-cost-the-typical-american-household-roughly-1500-each-year/">analysis</a> by the left-leaning Center for American Progress said that his tariff plans could cost the typical American household an extra $1,500 a year.Tariffs are typically used to raise government revenue and bolster domestic manufacturing. Trump enacted them in his first term as part of his "America First" policies, including a 25% tariff on Chinese goods that ultimately <a target="_blank" rel="" class="" href="https://www.businessinsider.com/trump-tariff-trade-war-risk-china-exports-great-depression-economy-2024-5">led to a trade war</a> between the two economies. While they did not significantly impact inflation, they did raise taxes for consumers. The Tax Foundation <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/where-does-trump-vance-stand-on-china-tariffs-inflation-taxes-2024-7">estimated</a> that Trump's tariffs during his first term amounted to a nearly $80 billion tax increase on Americans buying Chinese imports.Trump's win is also expected to influence the Federal Reserve's upcoming decisions on interest rates. While it's too soon for the Fed to make any adjustments since Trump has not yet implemented any tariffs, members of the Federal Open Market Committee will likely begin discussing how Trump's future economic policies could affect consumers — including whether the central bank would need to hike interest rates in the future in response to inflationary pressure.The Fed is expected to <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-federal-reserve-election-jerome-powell-inflation-jobs-2024-11">cut interest rates by 25 basis points</a> on Thursday, and Fed chair Jerome Powell will likely offer some insight into the Fed's direction following Trump's victory.However, the future of the Federal Reserve <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cut-trump-fed-powell-reaction-independence-history-2024-9">is uncertain under Trump</a>. The president-elect has previously suggested that he would like to have a say over interest-rate decisions, something presidents do not currently have. This raises the question of whether the central bank would continue to remain politically independent.Americans will likely learn more about what to expect from Trump as the year comes to a close. While Trump has maintained that his policies will help the economy and leave Americans better off, the Nobel Prize-winning economist Joseph Stiglitz <a target="_blank" class="" href="https://www.businessinsider.com/trump-presidency-policies-inflation-economy-americans-joseph-stiglitz-letter-2024-6">previously told Business Insider</a> that the "general consensus" among experts is that "the Trump administration would be more inflationary.""The broad assessment of the consequences of that is that the Fed would be forced to raise interest rates, and all that combined would still serve to increase inflation even as unemployment increased and GDP slowed," he said.

Get ready for inflation and interest rates to rise again

<ul class="summary-list"><li>Russia's economy faces stress as high interest rates fail to control inflation.</li><li>Inflation hits 9.8% in September, with prices of food staples surging this year.</li></ul>Russia's economy has defied doomsday predictions more than 32 months into its full-scale invasion of Ukraine.But Russia's <a target="_blank" href="https://www.businessinsider.com/russian-economy-overheating-consumer-spending-tourism-central-bank-interest-rate-2024-7">red-hot wartime economy</a> comes with a price: inflation, which hit <a target="_blank" class="" href="https://www.cbr.ru/eng/press/keypr/">9.8% in September.</a>The price hikes are trickling down to basic food items, with prices of potatoes — a Russian staple — surging this year by 64% as of November 5, according to <a target="_blank" class="" href="https://rosstat.gov.ru/storage/mediabank/172_08-11-2024.html">official statistics.</a>Potatoes' price surge stems from bad weather and the rising cost of production amid a <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-outlook-ukraine-war-worker-shortage-population-brain-drain-2024-8">labor shortage</a> and rising wages.It's not just potatoes. The data from Rosstat, Russia's federal statistics service, show that food prices have generally risen across the board this year.In late October, economists on the <a target="_blank" rel=" nofollow" class="" href="https://t.me/russianmacro/20015">MMI Telegram channel</a>, a Russian discussion group, called the acceleration in prices "frightening."The situation is so bad that people are stealing butter from supermarkets. <a target="_blank" class="" href="https://www.businessinsider.com/russia-ukraine-war-butter-prices-soar-vladimir-putin-2024-11">Butter prices</a> have risen by 27.5% this year.Inflation has also hit a range of processed goods in recent months, including bread, dairy, chocolate, and beer, <a target="_blank" class="" href="https://www.themoscowtimes.com/2024/08/15/russian-food-suppliers-warn-of-price-hikes-up-to-40-a86026">Russian media</a> reported.The pre-Christmas surge in food prices isn't new.Last year, <a target="_blank" class="" href="https://www.businessinsider.com/putin-apologizes-for-egg-prices-as-russian-inflation-soars-2023-12">Russian President Vladimir Putin</a> had to apologize for a jump in egg prices.To tame prices, Russia's<a target="_blank" class="" href="https://www.cbr.ru/eng/press/keypr/"> central bank</a> has hiked its key interest rate to a <a target="_blank" rel=" nofollow" class="" href="https://apnews.com/article/russia-interest-rates-0fa1d7385be622fd98756a5b4e715262">record high</a> of 21% last month. <a target="_blank" class="" href="https://www.cbr.ru/dkp/mp_dec/decision_key_rate/summary_key_rate_06112024/">It said last week</a> that it could hike its key rate again at its next meeting in December.High interest rates are irritating business leaders, who are more loudly critiquing the central bank's policies.Sergei Chemezov, the CEO of the defense conglomerate Rostec, said in an <a target="_blank" class="" href="https://www.businessinsider.com/russias-defense-sector-on-overdrive-but-firms-warn-of-collapse-2024-11">address</a> to Russian senators in late October that "record" interest rates were "eating up" profits.Chemezov further warned that the high borrowing rates would eventually bankrupt most enterprises.Last week, officials and business leaders at an <a target="_blank" class="" href="https://www.businessinsider.com/russia-economic-experts-forecast-bumpy-2025-for-country-inflation-putin-2024-11">economic forum in central Russia</a> expressed pessimism about the country's economy next year. They predict lower-than-expected growth and investment delays due to the central bank's rate hike and a lack of state funding.

Russia's inflation is so bad that potatoes cost 64% more than they did at the start of the year

<ul class="summary-list"><li><keyword id="19935006" type="General" weightage="100" keywordseo="Guyana" source="keywords">Guyana</keyword>, the tiny South American nation, plans to give $500 to every citizen aged 18 and over.</li><li>Its president said the <keyword id="21044249" type="General" weightage="20" keywordseo="cash-payments" source="keywords">cash payments</keyword> aim to narrow disparities and help with higher living costs.</li></ul>The world's fastest-growing economy is giving the equivalent of $500 to each of its adult citizens as it works to share its newfound oil wealth and soften the sting of higher living costs. President <keyword id="21170274" type="General" weightage="20" keywordseo="Mohamed-Irfaan-Ali" source="keywords">Mohamed Irfaan Ali</keyword> of Guyana, the South American country with just 800,000 people, announced the move last week and said his government would begin distributing the cash immediately. He previously said each household would receive the Guyanese-dollar equivalent of $1,000, but switched to an individual payment after locals raised concerns about how a household would be defined and how the money would be shared within each home. "This is how we are promoting prosperity, ownership, distribution of wealth," Ali said. "This is how the resources and revenue of this country are being spent every single day to lift the lives of people, to expand national wealth, coastal wealth, and community wealth." Guyanese authorities have taken other steps to combat the rising cost of living, the post noted. They've removed more than 200 taxes and fees, including the excise tax on fuel and VAT on water, electricity, and some basic foods. They also gave a one-time, tax-free grant worth about $120 a person to a group that included teachers and public servants last year. Nicolas Suarez, a senior economist at S&amp;P Global Market Intelligence who covers Latin America, told Business Insider the original plan would "increase the average household's disposable income, alleviating some budget constraints." He estimated the initial program's scale at 1.5% of national GDP and 7.9% of Guyana's Natural Resource Fund, which officials set up in 2019 to prudently manage the country's oil revenues. The scale of the updated plan is less clear. World Health Organization data suggests there are about 711,000 Guyanese aged 15 and over, so if we assume the 18+ population is 660,000 people and all of them receive $500 each, the program could cost $330 million —not far off the government's estimate of $290 million for the original household payout. "In the short term, this measure could boost private consumption growth, but it may not ease <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword>ary pressures," Suarez said about the previous plan. "On the contrary, higher government expenditures could lead to significant inflationary pressures over the next 12 months." He noted that inflation in Guyana has climbed from a pre-pandemic average of 2.3% a year to 3.3% in August. He noted that <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-is-inflation">inflation</a> in Guyana has climbed from a pre-pandemic average of 2.3% a year to 3.3% in August. <h2>Riding an oil wave</h2>Guyana, an English-speaking former colony that gained independence from Britain in 1966, borders Venezuela to the west, Brazil to the south, and Suriname to the east. Its natural resource fund is similar to <a target="_blank" class="" href="https://www.businessinsider.com/norway-sovereign-wealth-fund-to-dump-russian-assets-ukraine-invasion-2022-2">Norway's oil fund</a>, set up in the 1990s to invest profits from the Scandinavian nation's oil-and-gas sector, protect the economy from fluctuations in energy revenues, and serve as a financial reserve and long-term savings plan for Norwegians. Norway's gas-powered sovereign wealth fund has helped to make it one of the world's wealthiest countries with an estimated population of 5.5 million and a GDP per capita of about $88,000 last year, according to World Bank data. Its oil fund held over $1.7 trillion of assets at the end of June, or more than $300,000 per Norwegian citizen. <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-chevron-hess-guyana-oil-economy-berkshire-hathaway-stock-2023-10">Exxon</a>, which has discovered an estimated <a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/oil-market-outlook-opec-price-cuts-us-crude-production-guyana-2023-12">11 billion barrels of oil equivalent</a> off Guyana's coastsince 2015, forecasts the country will produce about 1.3 million barrels a day once the company's six projects are online in 2027. That amount rivals Qatar's current output and would rank Guyana among the world's 20 largest oil producers. Guyana ramped up production to more than 600,000 barrels a day earlier this year, fueling roughly 50% <a target="_blank" class="" href="https://www.businessinsider.com/oil-market-guyana-economy-crude-production-outlook-opec-price-cuts-2023-12">GDP growth</a> in the first half and putting Guyana on track to grow about 43% this year, Ali said in an August webcast. Real GDP soared by about 62% in 2022 then 33% in 2023, while GDP per capita has surged from $7,000 in 2020 to around $26,000 this year, International Monetary Fund data shows. <h2>Sharing the wealth</h2>Guyana's payment to its people "sounds like great news," Karl Widerquist, a philosophy professor at Georgetown University-Qatar and the author of several books about universal basic income (UBI) told BI. He described the one-time distribution as "basic capital" or a "stakeholder grant" instead of a basic income, but said "it's a big step in that direction if they go through with it." UBI typically refers to a recurring cash payment made to every individual in a society regardless of their wealth, with no restrictions on <a target="_blank" class="" href="https://www.businessinsider.com/how-people-spend-universal-basic-income-ubi-food-housing-transportation-2024-4">how the money is spent</a> and no requirement to pay it back. Proponents hail it as a safety net against poverty that relieves financial strain and frees people to change jobs, start businesses, and weather periods of bad luck without stressing about paying their bills. Guyana's one-off, unconditional cash grant is a "positive step," Cleo Goodman, the basic income lead at the Autonomy Institute think tank, told BI. "This is a welcome injection of cash for citizens." However, she noted a guaranteed, regular income would be a "much more comprehensive commitment to redistributing this newfound wealth." Guyana was colonized by the Netherlands before Britain gained control in the late 18th century. The nation, which shares borders with Venezuela, Brazil and Suriname, became independent in 1966. Correction: October 18, 2024 — An earlier version of this story mistakenly reported an outdated version of the policy. Guyana announced Wednesday it had decided to give the equivalent of $500 to every adult, rather than a higher amount to each household as previously planned. The story also misstated the value of the previously announced figure in US dollars. It was $1,000 a household, not $2,000.

This tiny country says it will give $500 to every adult as an Exxon oil boom supercharges its economy

<ul class="summary-list"><li>Kamala Harris unveiled plans for the first-ever federal ban on price gouging.</li><li>Some experts question whether price gouging has been a central factor in inflation's rise.</li></ul>Vice President Kamala Harris' proposal to combat grocery inflation hasn't elicited a range of opinions from economists, and many have turned to history to dispute her idea.Last week, the Democratic presidential nominee unveiled early details of her economic platform, which included a <a target="_blank" href="https://www.businessinsider.com/grocery-costs-inflation-kamala-harris-ban-price-gouging-election-trump-2024-8">pledge to ban grocery price gouging</a>. Price gouging skepticismThe plan has elicited a range of responses from experts and economists, with some deriding it as an unnecessary overstep by the government to address a problem that is not at the heart of the inflation dilemma. "I hope she walks this one back. She had some good ideas, some mixed ideas," Harvard professor Kenneth Rogoff told <a target="_blank" href="https://www.cnn.com/2024/08/17/politics/video/harris-economic-vision-professor-rogoff-digvid">CNN</a>. "This was a horrible idea."Rogoff's position was based on doubts about whether retailers were to blame for the wave of inflation that has weighed on Americans' spending power in the last two years. Harris called for a first-ever federal ban on the basis that firms have notched record profits at a time when many households have struggled to adjust to runaway costs. Since January 2020, grocery prices have jumped 25%.But according to market veteran Ed Yardeni, data doesn't suggest gouging is the problem.He wrote this week that the ratio between the consumer price index and supermarket producer price index has been dropping since 2000, suggesting that profit margins in the industry have been trending down, not up. CPI tracks prices paid by consumers, while PPI measures the prices paid by wholesalers.And yet, consumers feel strongly that corporate greed is a central factor for why prices have risen abruptly. In a <a target="_blank" href="https://socialeconomicslab.org/wp-content/uploads/2024/05/Why_dislike_inflation.pdf">study</a> from May, price gouging was the second leading perceived cause of inflation among surveyed consumers.Real-world examples do exist. Cal-Maine, the largest egg producer in the US, saw its profits rocket <a target="_blank" href="https://www.cnn.com/2023/03/29/business/egg-profits-cal-maine/index.html">718% in the first quarter of 2023</a>. By December, the distributor was <a target="_blank" href="https://www.reuters.com/legal/litigation/us-jury-awards-177-mln-kraft-other-producers-egg-price-fixing-case-2023-12-01/">found liable</a> for artificially inflating prices.'Price controls' a partisan label?Whether gouging deserves the blame for inflation, some have also criticized Harris' plan as an ineffective government overreach.Pundits have alluded to the price controls under President Richard Nixon. The Republican executive froze prices and wages over fifty years ago to clamp down on inflation, but it eventually jumped much higher, according to <a target="_blank" href="https://www.cato.org/blog/unhappy-40th-anniversary-nixons-wage-price-controls">Cato Institute</a>, a libertarian think tank. "I think all of us would agree that price controls have never worked," Stephen Moore, visiting senior fellow at the conservative think tank Heritage Foundation, told <a target="_blank" class="" href="https://www.cnbc.com/video/2024/08/19/harris-price-gouging-proposal-is-a-common-sense-set-of-policies-groundworkas-lindsay-owens.html">CNBC</a>. "They certainly were a complete failure in the 1970s when we had major inflation that hit 11%-12% and the government couldn't get rid of it."Broader <a target="_blank" href="https://www.stlouisfed.org/publications/regional-economist/2022/mar/why-price-controls-should-stay-history-books">examples through history</a> show that price ceilings can distort the allocation of goods and supply, as prices no longer serve to signal a surplus or scarcity. This can eventually lead to shortages and higher pricing.However, supporters of the plan argue that such comparisons are an overreaction to Harris's proposal, as the details thus far say nothing about fixing costs."This is not 'price controls.' 40 states have price gouging laws on the books. These are red states. These are blue states," Groundwork Collaborative executive director Lindsay Owens said, noting that Donald Trump also cracked down medical supply price gouging during the pandemic. "This is a common-sense set of policies."The federal ban would help patch up legal inconsistencies between each state's approach, experts <a target="_blank" href="https://www.businessinsider.com/how-to-lower-grocery-prices-inflation-harris-price-gouging-proposal-2024-8?as">told Business Insider</a>. Harris would likely find success by empowering the Federal Trade Commission to pursue bad actors, though the challenge would lie in carefully defining price gouging.While the plan's advocates have cheered this on, anonymous campaign sources that spoke with The New York Times noted that even <a target="_blank" href="https://www.nytimes.com/2024/08/21/business/economy/harris-price-gouging-ban-groceries.html">allies may have the wrong idea about what it can do</a>.Given that it would be modeled on state laws, the ban would really only come into effect in emergencies, officials said, stating that just as price-control critiques are misguided, so are expectations that the ban will immediately cut down on grocery costs.For that to happen, a campaign official cited Harris' other policy ideas, such as efforts to spur competition and support small businesses in the food sector.While economists are divided, voters seem supportive of the proposal. Summer polling from the Democratic firm Blueprint found that four out of five voters are in favor of price-gouging prosecution, as well as price fixing.

A necessary step or government overreach? Economists are divided over Kamala Harris' plan to clamp down on food inflation

<ul class="summary-list"><li><keyword id="20335345" type="General" weightage="20" keywordseo="McDonalds" source="keywords" meta.keywordsubtype="org" meta.entityname="McDonald's" meta.hostid="261" meta.entityid="McDonald's">McDonald's</keyword> global sales fell for the second consecutive quarter, down 1.5%.</li><li>Fast-food chains have faced challenges from <keyword id="19999654" type="General" weightage="20" keywordseo="food-inflation" source="keywords">food inflation</keyword>, affecting <keyword id="20139791" type="General" weightage="20" keywordseo="consumer-spending" source="keywords">consumer spending</keyword> habits.</li></ul>Global sales at McDonald's have fallen for a second consecutive quarter as the fast-food chain struggled in international markets, especially France, the UK, China, and the Middle East. Sales were down 1.5% in its third quarter, following from a 1% slide in the previous quarter, ending June 30. Comparable sales in the US were virtually flat, up 0.3% from the same period in 2023, while sales in international markets dropped 2.1%. Sales in licensed international markets fell 3.5%. "We will stay laser-focused on providing an unparalleled experience with simple, everyday value and affordability that our consumers can count on as they continue to be mindful about their spending," McDonald's CEO Chris Kempczinski said in the earnings release. While sales dropped, <a target="_blank" class="" href="https://www.businessinsider.com/trying-most-expensive-mcdonalds-switzerland-disappointing-fries-best-burger-2023-12">the Golden Arches</a>' revenue increased 3% to $6.9 billion, beating the $6.82 billion figure that was the consensus of analysts. Net income declined 3%, down to $2.26 billion, down from $2.32 billion in the last quarter. Shares in McDonald's fell 2.7% in premarket trade after the results were announced. Fast-food restaurants have struggled with food inflation since the COVID-19 pandemic. The most recent <a target="_blank" class="" href="https://www.bls.gov/news.release/cpi.nr0.htm">US consumer price index</a>, released in early October, showed that the cost of food away from home rose 4% in the prior 12 months, significantly higher than gains in both grocery store prices and the overall CPI. Chains, including McDonald's, have responded to the soaring cost of ingredients and labor by raising menu prices. Consumers have felt the strain of rising costs. Analysts have said that some consumers are <a target="_blank" class="" href="https://www.businessinsider.com/why-fast-food-is-so-much-more-expensive-value-affordable-2024-4">comparing the rising cost of fast food to the slowing rate of grocery inflation</a> and choosing to cook more often at home instead of eating out. Lower-income customers have particularly felt the pinch. "The decline in comparable sales signals that consumers continue to retrench from eating out," Neil Saunders, managing director of GlobalData's US retail and consumer division, told Business Insider. "Negative comparable sales and higher costs have also put some pressure on the bottom line where both operating and net income are down," he said. It's uncertain how the <a href="https://www.businessinsider.com/mcdonalds-e-coli-outbreak-cases-rise-75-people-2024-10" target="_blank">recent E. </a><a href="https://www.businessinsider.com/mcdonalds-e-coli-outbreak-cases-rise-75-people-2024-10" target="_blank">coli outbreak</a> in several states might affect McDonald's fourth-quarter results. One person died, and at least 75 were sickened. The Food and Drug Administration has said that the slivered onions on affected <a href="https://www.businessinsider.com/mcdonalds-quarter-pounder-ecoli-outbreak-why-important-sales-2024-10" target="_blank">Quarter Pounder burgers</a> were "a likely source of contamination," and the supplier of the topping <a href="https://www.businessinsider.com/mcdonalds-supplier-taylor-farms-recalls-onions-amid-e-coli-outbreak-2024-10" target="_blank">has issued a recall</a>. Correction: October 29, 2024 — An earlier version of this story overstated what has been confirmed about the recent <keyword id="22099782" type="General" weightage="20" keywordseo="E-coli-outbreak" source="keywords">E. coli outbreak</keyword> linked to McDonald's. The FDA is still investigating the outbreak and has not conclusively settled on a cause, though it has said slivered onions from one of the chain's suppliers were "a likely source of contamination."

McDonald's sales dropped for the 2nd quarter in a row as customers keep tightening their belts

<ul class="summary-list"><li>Daily essentials are inflating faster than broad inflation indexes, making life harder for many Americans.</li><li>The ALICE Essentials Index shows a 7.3% annual increase in basic costs from 2021 to 2023.</li></ul>It's no secret that Americans have been feeling the <a target="_blank" href="https://www.businessinsider.com/cpi-inflation-may-prices-rent-gas-fed-interest-rates-2024-6">pinch of inflation</a> everywhere they go — but daily essentials are only getting pricier. It could be making <a target="_blank" href="https://www.businessinsider.com/inflation-cost-of-living-what-is-middle-class-housing-market-2024-4">workers feel even worse</a>.The latest report from research organization <a target="_blank" href="https://www.unitedforalice.org/national-overview">United For ALICE</a> — which tracks asset-limited, income-constrained, but employed Americans — looks at how the costs of basic essentials are rising. <a target="_blank" href="https://www.businessinsider.com/middle-class-americans-earning-above-poverty-live-paycheck-to-paycheck-2024-4">ALICE Americans</a> make <a target="_blank" href="https://www.businessinsider.com/alice-living-paycheck-to-paycheck-without-government-assistance-snap-medicaid-2024-5">above the federal poverty level</a> but not enough to comfortably afford all their daily expenses, often making too much to qualify for government assistance.The ALICE Essentials Index, which includes housing, childcare, food, transportation, healthcare, and technology costs, has risen by a projected 7.3% annually from 2021 to 2023; comparatively, CPI has risen by 6.1%."CPI measures our whole economy and the goods and services that people of all income levels purchase, whereas ALICE Essentials is only the basics," Stephanie Hoopes, national director at United For ALICE, told Business Insider. "Those basics have been increasing even more" than broader prices, she said.And those costs are <a target="_blank" href="https://www.businessinsider.com/pay-raise-wages-inflation-recession-federal-reserve-rate-hikes-2023-11">even outpacing the rapid wage growth</a> that lower-earning Americans have seen.Data on the annual rate of change between 2021 and projected 2023 values for the ALICE Essentials Index suggests that prices have increased most in the West and Southeast. Arizona's annual rate of change for prices of the basic goods and services tracked by the essentials index during this time period was 10.4%, while Georgia, Florida, and South Carolina were all above 9%.The Midwest and Northeast were less impacted by rising prices for essentials, though many of these states were still in the 6% to 7% range.Even so, prices are still rising everywhere, as the index jumped in each region since 2021 — rising faster than most years prior. While United For ALICE anticipates the index plateauing in the South, the Midwest, West, and Northeast are expected to continue increasing through 2024.Since most inflation indexes focus on urban areas, rural areas are often omitted from many inflation numbers. The ALICE Essentials Index for rural areas was slightly higher than that for urban areas, at 7.5% and 7.2%, respectively.Americans who are ALICE were already struggling to get by: Business Insider has spoken to many employed Americans — including a <a target="_blank" href="https://www.businessinsider.com/millennial-genx-couple-makes-six-figures-feels-like-poverty-alice-2024-5">couple who bring home over six figures</a> — who still can't make ends meet.Many are excluded from federal assistance, frequently tied to an <a target="_blank" href="https://www.businessinsider.com/poverty-line-leaves-behind-low-income-americans-snap-medicare-wic-2024-6">outdated federal poverty line</a>. The poverty line is based on a formula from the 1960s that estimated people spent about a third of their income on food, which is now only 13%."Long before everybody else was upset about inflation, ALICE was dealing with inflation," Hoopes said.There's also good news in the economy, especially for those with lower wages: <a target="_blank" href="https://www.businessinsider.com/how-unemployment-rate-job-growth-looked-in-may-2024-6">Jobs numbers</a> have been encouraging, as the economy added 272,000 jobs last month — almost 100,000 more than expectations. Healthcare and leisure and hospitality were two sectors seeing the largest job increases. Still, ALICE Americans tend to be overrepresented in these roles, as many pay below the ALICE threshold of about $55,000 a year.Rising prices for essentials might be a factor in many Americans' economic gloom."I think this really helps explain the disconnect between the broad macroeconomic indicators that are showing a strong economy and that personal disconnect that we see on the ground," Hoopes said, adding: "Just the mere fact that working full time in some of these jobs that are hard jobs, you're not able to support a basic family budget — I think that explains a lot of dissatisfaction and the disconnect."Are you struggling to keep up with the cost of daily essentials? Contact these reporters at <a target="_blank" href="mailto:nsheidlower@businessinsider.com">nsheidlower@businessinsider.com</a> and <a target="_blank" href="mailto:jkaplan@businessinsider.com">jkaplan@businessinsider.com</a>.

Here's how inflation has ratcheted up the cost of basics like housing and food for families across the US

<ul class="summary-list"><li>Inflation cooled in July based on the consumer price index.</li><li>CPI rose 2.9% over the year in July, just below the forecast.</li></ul>New data out Wednesday showed inflation cooled again in July.The consumer price index increased 2.9% over the year ending in July, coming in cooler than the expected 3.0% increase and just lower than <a target="_blank" class="" href="https://www.businessinsider.com/inflation-cpi-june-prices-food-energy-fed-interest-rate-cuts-2024-7">June's 3.0% read</a>. It's the first time the inflation rate has been below 3% since March 2021, and it adds to the case that the Fed could cut rates at its next meeting.Over the month, the consumer price index rose 0.2% in July. A small increase was <a target="_blank" class="" href="https://www.investing.com/economic-calendar/cpi-69">expected</a> after a decrease of 0.1% in June.Core CPI, which excludes volatile food and energy prices, rose 3.2% for the 12 months ending July, following a 3.3% increase in June. A 3.2% increase was expected for July. This index rose 0.2% over the month from June to July, the same as the forecast of 0.2% and above the 0.1% increase in June.Meanwhile, the Bureau of Labor Statistics said on Tuesday the <a target="_blank" class="" href="https://www.bls.gov/ppi/">producer price index</a> for final demand rose 0.1% from June to July, just short of the 0.2% forecast and the previous month-over-month increase.The next Federal Open Market Committee meeting is in September, and interest rate cuts are expected after the Fed has held interest rates steady for the last year, including the <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-likely-september-federal-reserve-holds-steady-july-2024-7">FOMC's most recent decision in July</a>. <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch</a> shows that markets predict the chances for a rate cut in September are pretty much 100%, but whether the Fed makes a standard-sized 25-basis-point cut or a larger 50-point cut is still up in the air.The Fed is watching for inflation to cool before committing to rate cuts. Federal Reserve Chair <a target="_blank" class="" href="https://www.youtube.com/watch?v=vv6n0oTJMRU">Jerome Powell said on July 9</a> that the Fed needs "more good data so that we can be confident that what we're seeing is really" inflation heading back toward the central bank's 2% target.Many economists think it's well past time for the Fed to cut interest rates and have expressed worries about the rapidly cooling labor market. Nick Bunker, the economic research director for North America at the Indeed Hiring Lab, told Business Insider after July's jobs report was released in early August by the Bureau of Labor Statistics that "the <a target="_blank" class="" href="https://www.businessinsider.com/jobs-unemployment-interest-rates-economy-recession-soft-landing-2024-8">soft landing for the US</a> labor market is in peril." The jobs report showed the unemployment rate stood at 4.3% in July, and the economy added 114,000 nonfarm payrolls. In July 2023, the unemployment rate was 3.5%, and the economy added 184,000 jobs.The labor market is cooling off, and <a target="_blank" class="" href="https://www.businessinsider.com/why-youre-not-getting-hired-job-interview-resume-advice-tips-2024-8">it might be harder to get a job</a> than a few years ago. "We're really moving into a place where this is more weakness than we should be comfortable with," Claudia <a target="_blank" class="" href="https://www.businessinsider.com/sahm-rule-recession-unemployment-federal-reserve-interest-rates-cut-2024-8">Sahm</a>, the chief economist at New Century Advisors and former Federal Reserve economist, said."We know that reducing policy restraint too soon or too much could result in a reversal of the progress we have seen on inflation," Powell <a target="_blank" class="" href="https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240731.pdf">said</a> at the end of July. "At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment."This is a developing story. Please check back for updates.

Inflation cooled in July, adding to the case for rate cuts at the next Fed meeting

<ul class="summary-list"><li>Donald Trump and Elon Musk called out the pain caused by high levels of inflation in recent years.</li><li>Trump bemoaned that people can't afford groceries and savers have been "decimated" by rising prices.</li></ul>Donald Trump and <a target="_blank" href="https://www.businessinsider.com/elon-musk">Elon Musk</a> lamented the <a target="_blank" class="" href="https://www.businessinsider.com/inflation-housing-food-alice-rent-poverty-healthcare-wage-growth-cpi-2024-6">brutal impact</a> of rising prices in their X Spaces conversation on Monday."It's a disaster with inflation," the former US president said. "It doesn't matter what you make. The inflation has eaten you alive."The annualized pace of price increases soared to a 40-year high of more than 9% in June 2022. It has <a target="_blank" class="" href="https://www.businessinsider.com/inflation-cpi-june-prices-food-energy-fed-interest-rate-cuts-2024-7">slowed markedly</a> since then to 3% in June, but remains well above the Federal Reserve's 2% target.Trump specifically called out the <a target="_blank" class="" href="https://www.businessinsider.com/why-youre-still-spending-much-of-your-budget-on-food-2024-2">steeper cost of food</a> for families. As the Republican presidential nominee, he's incentivized to paint a dour picture of the economy under the Democrats, and promise he'll make things better if voters back him in November's election."They don't have enough money to buy groceries; the inflation has killed them," Trump said. "They used to be able to buy a whole cart, and today a lot of people just don't have the money. They go in and can't buy anything."<h2 id="c0292d01-998c-4040-8141-38ba2a6670d7">Savers punished</h2>Trump bemoaned that lifetime savers have been unfairly punished by soaring prices."The people that saved money … they got no interest on their money, and inflation destroyed them," he said. "Those people have been absolutely decimated."Americans were able to put away significant sums four of five years ago, Trump noted. "Today, they're <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/big-short-michael-burry-jpmorgan-consumer-inflation-rates-banking-crisis-2023-4">using all their money</a> and borrowing money just to live. It's a horrible thing that's happening."This historic bout of inflation has been <a target="_blank" class="" href="https://www.businessinsider.com/economic-outlook-pandemic-stock-market-crash-inflation-recession-rates-ai-2024-2">blamed on several factors</a>. The pandemic disrupted worldwide production, snarled supply chains, shuttered businesses, and fueled labor shortages. Russia's invasion of Ukraine roiled the international oil trade and caused energy prices to soar. World governments spent heavily to shore up their economies, stoking heavy demand in a period of constrained supply and causing prices to climb.Musk — the world's richest person, CEO of <a target="_blank" href="https://www.businessinsider.com/tesla-ceo-elon-musk">Tesla</a> and <a target="_blank" href="https://www.businessinsider.com/spacex-elon-musk">SpaceX</a>, and X's owner — agreed with Trump that inflation is a pressing problem during their conversation."A lot of people are concerned about the economy, a lot of people are concerned about inflation," he said. "Inflation is effectively a tax on people that saved money and for people that are working day to day."Musk blamed fast-rising prices on public officials splashing cash."Inflation comes from government overspending because the checks never bounce when they're written by the government," he said. "So if the government spends far more than it brings in, that increases the money supply. And if the money supply increases faster than the rate of goods and services, that's inflation."<h2 id="259f4a90-f256-467f-85ef-c9b9b9d1bb34">Deregulation call</h2>Musk called for authorities to cut back on spending and suggested a government efficiency commission be appointed to ensure public funds are spent wisely. He underlined the ballooning federal debt and the <a target="_blank" class="" href="https://www.businessinsider.com/us-national-debt-government-spending-stock-market-financial-crisis-economy-2024-3">spiraling size</a> of the interest payments required to service it."If you solve government overspending, you solve inflation, which improves the living standards of the average person," Musk said. He added that deregulation would help to eliminate rules and restrictions that make compliance costs "extreme for no reason."Musk has <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-fightingwars-alot-of-fronts-2024-8">frequently complained</a> about government overreach and red tape in recent years, making his latest comments unsurprising. But his companies have undeniably benefited from state funds in the form of clean-energy subsidies, tax credits, and space contracts. He may well see those as valuable uses of taxpayer money, and wish to cut waste elsewhere.Trump and Musk are right to say that prices are significantly higher now than even a couple years ago. However, inflation appears to be falling, <a target="_blank" class="" href="https://www.businessinsider.com/emergency-rate-cut-fed-recession-july-jobs-report-unemployment-powell-2024-8">freeing the Fed</a> to focus on bolstering growth and avoiding a recession by starting to undo the hikes to interest rates it's made in recent years to curb price growth.

Trump called inflation a disaster for consumers — and Musk blamed it on government waste

Mumbai (Maharashtra) [India], August 8 (ANI): <keyword id="64190" type="General" weightage="100" keywordseo="RBI-Governor" source="Orion">RBI Governor</keyword> <keyword id="6359111" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="Orion">Shaktikanta Das</keyword> says <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> will moderate from July onwards as the monsoon has improved and <keyword id="489239" type="General" weightage="20" keywordseo="Global-food-prices" source="Orion">global food prices</keyword> have shown signs of easing in July. Das said, "Global food prices showed signs of easing in the month of July after registering an increase since March 2024." A degree of relief in food inflation is expected from the pickup in southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta Das. Das added, "Assuming a normal monsoon and taking into account the 4.9 per cent inflation print, Q1 CPI inflation for the current financial year (2024-25) is projected at 4.5 per cent, with q2 at 4.4 per cent, Q3 at 4.7 per cent and Q4 at 4.3 per cent. CPI inflation for the first quarter of next financial year (Q1 2025-26) is projected at 4.4 per cent." The inflation landscape reflects mixed signals, to which Das said, "<keyword id="21258540" type="General" weightage="20" keywordseo="headline-inflation" source="keywords">Headline inflation</keyword> eased up to 5.1 per cent in June 2024 due to higher than expected food inflation. Fuel remained in deflation for the 10th consecutive month. Core inflation moderated to a historic low in the months of May and June." RBI Governor Shaktikanta Das, outlined the <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> with real <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> of 7.2 per cent for the fiscal year 2024-25 and headline inflation eased to 5.1 per cent in June, on Thursday. Das said, "Real GDP growth for 2024-25 is projected at 7.2 per cent with Q1 at 7.1 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent and Q4 at 7.2 per cent. Real GDP growth for Q1 2025-26, this is something which we are giving for the first time, is projected at 7.2 per cent. The risks are evenly balanced." He added, "We have slightly moderated the <keyword id="387719" type="General" weightage="20" keywordseo="growth-projection" source="Orion">growth projection</keyword> for the first quarter of the current financial year in relation to the projection we gave in the previous MPC in June. This is primarily due to updated information on certain high-frequency indicators which show lower than anticipated corporate profitability, general government expenditure and core industries output." This forecast marks a slight moderation from previous estimates provided in the Monetary Policy Committee (MPC) meeting in June, attributed to recent updates on high-frequency indicators such as corporate profitability, general government expenditure, and core industries output. The inflation landscape reflects mixed signals, to which Das said, "Headline inflation eased up to 5.1 per cent in June 2024 due to higher than expected food inflation. Fuel remained in deflation for the 10th consecutive month. Core inflation moderated to a historic low in the months of May and June." Balancing robust growth projections with a nuanced understanding of inflation dynamics Governor Das stated, "Food inflation which has a weight of around 46 per cent in the CPI basket, contributed to more than 75 per cent of headline inflation in May and June. Vegetable prices increased sharply and contributed about 35 per cent to inflation in June. High inflation pressures persisted across other major food items also." Governor Das mentioned softening in core inflation continues to be broad-based with core services inflation touching a new low in the current CPI series during the month of May and June 2024. Das stated, "The high food price momentum likely to have continued in the month of July also. Large favourable base effects may however push headline inflation downwards in July. The Impact of the revision in milk prices mobile tariffs also needs to be carefully monitored." A degree of relief in food inflation is expected from the pickup in south west monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta das. Das anticipates some relief in food inflation due to the expected pickup in the southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals remain above the normative levels, contributing to a more stable food price environment. Global food prices, which have been on an upward trajectory since March 2024, showed signs of easing in July.

RBI Governor Shaktikanta Das projects 7.2% GDP growth for 2024-25, reports eased inflation to 5.1% in June

<ul class="summary-list"><li>Cooling labor data could still lead the Fed to cut rates by 50 basis points, Goldman Sachs' David Solomon says.</li><li>"I think the percentage chance is in the low 30s," Solomon said of a 50 basis point cut.</li></ul>It wasn't long ago that Goldman Sachs CEO David Solomon <a target="_blank" class="" href="https://www.businessinsider.com/inflation-recession-stagflation-dimon-solomon-interest-rates-economic-outlook-fed-2024-5">forecasted there could be no rate cuts</a> from the Federal Reserve this year.Now, even as the latest inflation data has most investors pricing in a 25 basis point cut in September, Solomon says a larger cut could still be in the cards. <a target="_blank" class="" href="https://www.cnbc.com/video/2024/09/11/watch-cnbcs-full-interview-with-goldman-sachs-ceo-david-solomon.html">In an interview with CNBC</a> on Wednesday, he pointed to weakening jobs data, which he says could warrant a bigger cut if labor conditions continue to soften."Our best guess is 25 [basis points]. But I think there's a case to be made for 50 [basis points] based on a little bit more softening in the labor market," Solomon told CNBC in a Wednesday interview."I think the percentage chance is in the low 30s," he said of a 50 basis point cut.Solomon said the depth of rate cuts will likely depend on further labor market data, which has flashed mixed signals in the last two months.A surprise unemployment rate increase in July sparked worries of a recession, while the August jobs report brought the unemployment rate down slightly to 4.2%, in line with expectations.Solomon forecasts the Fed will make two to three rate cuts this fall, and any further cuts will depend on progress toward the central bank's 2% inflation goal."We have to watch carefully the trajectory of inflation, and also the trajectory of growth. And candidly, it's very hard to speculate about that as you look forward because the policy direction we're going to have as we look into 2025 and 2026 is very uncertain," he said.Solomon's comments come after the highly-anticipated August consumer-price index was a mixed bag of data. The annual inflation rate eased to 2.5%, slower than forecasts and down from <a target="_blank" class="" href="https://www.businessinsider.com/inflation-consumer-price-index-in-july-fed-interest-rates-2024-8?utm_medium=ingest&amp;utm_source=markets&amp;_gl=1*16zorxn*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTcyNTk4NTE4Ni4xMjEuMS4xNzI1OTg1MzE1LjYwLjAuMA..">2.9% in July.</a> However, monthly core inflation—which excludes food and energy prices—<a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/inflation-report-stock-market-today-fed-rate-cuts-economy-outlook2024-9">rose unexpectedly</a> to 0.3%, up from 0.2% in July.Those numbers have most investors <a target="_blank" class="" href="https://www.businessinsider.com/inflation-august-consumer-price-index-federal-reserve-rate-cuts-2024-9#:~:text=Core%20CPI%20increased%203.2%25%20over,greater%20than%20July's%205.1%25%20increase.">pricing in a 25 basis point rate cut</a> at next week's Fed policy meeting."Amidst the debate over the magnitude of the first Fed rate cut, the August CPI data helped solidify the case for a 25bps rate cut at the September 18 meeting, rather than a 50bps reduction," EY economist Lydia Boussour said in a Wednesday note.Solomon said he continues to predict a 25 basis point cut, and is "predominantly in the soft landing camp," he said.

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