New report on inflation could spur more action from the Federal Reserve

CHICAGO (CBS) — The rate of inflation is showing no signs of slowing down.

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Just  last month, price increases hit a 40-year high and a new report shows it’s gearing up to kick into high gear again. CBS 2’s Joe Donlon breaks down the bottom line.

Gas prices dropped during the summer, but recently started climbing again. According to AAA, the national average is up about 20 cents a gallon in the past month.

“It’s ridiculous.”

“Wish they weren’t so high, but you know, it’s what we have to deal with.”

And Americans are also dealing with higher costs just about everywhere else.

“Everything’s more expensive.”

A new report from the U.S. Bureau of Labor Statistics finds overall, prices jumped 8.2% in September, compared to a year earlier.

Inside the numbers, prices at the grocery store increased 13%. Eggs are up more than 30%, coffee is nearly 16% higher. Home costs are also rising. Electricity is up more than 15% and natural gas to heat the home has increased 33%.

The new report will likely bring new action from the Federal Reserve next month. The Fed has been raising interest rates in an attempt to bring down inflation, but the strategy is having little impact.

“The Fed is absolutely on course for another rate increase, the sixth of the year.”

CBS News business analyst Jill Schlesinger said the board will likely increase rates three-quarters of a percentage point, the same action they took in September.

“In the minutes from the Fed’s September meeting, they articulated something very clearly. They said they are much more concerned about doing too little on interest rates and inflation rather than too much,” Schlesinger said.

If the Fed stays aggressive, it could put a key interest rate at a 14-year high by the end of the year. 

There is a bit of good news buried in the report. The price of a television is down nearly 18% compared to last year and smartphones are down 21%

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