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The Week in Business: Prices Keep Climbing

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Recent inflation data on Thursday dashed any remaining hopes that the Federal Reserve might soon ease off its plans to proceed aggressively raising rates of interest. The Consumer Price Index showed overall inflation climbing 8.2 percent within the 12 months through September — a slight moderation from August but still uncomfortably high. Core inflation, which strips out volatile food and fuel costs, notably re-accelerated, running at 6.6 percent. The persistence of inflation within the face of the Fed’s policy moves could also be frustrating, but it surely will not be altogether surprising. Most economists expected the strategy of wrestling down rising prices and cooling off the economy to be slow — though it’s starting to look that even small signs of progress will not be cropping up where they need to. And now some worry that as inflation becomes more entrenched it may lead to a wage-price spiral, a no-win feedback loop through which rising prices result in wage increases that then reinforce inflation.

Rising prices may be particularly painful for retirees, who are sometimes on fixed incomes and may’t seek latest work as inflation eats into their earnings. Some relief is on the best way: Shortly after September’s inflation numbers were released on Thursday, the Social Security Administration announced the biggest cost-of-living adjustment, or COLA, in greater than 40 years, raising advantages 8.7 percent starting next 12 months. The bump will affect roughly 52.5 million people 65 and older in addition to about 12 million individuals with disabilities, amongst others who collect Social Security, helping their incomes keep pace with inflation. Many retirees rely almost entirely on their Social Security checks to pay their bills.

The word “recession” could also be on many individuals’s minds, however the leaders of the largest U.S. banks say they aren’t panicking yet. Reporting on JPMorgan Chase’s third-quarter earnings, the bank’s chief executive, Jamie Dimon, said consumers were still “healthy,” pointing to a powerful jobs market and the household savings cushions that he said were keeping bank card spending up. Wells Fargo’s chief executive, Charles Scharf, said his bank’s customers remained in “strong financial condition.” But these banks are still taking steps to arrange for what Mr. Dimon warned were “significant headwinds immediately in front of us.” Citigroup, JPMorgan Chase and Wells Fargo all reported smaller profits compared with the third quarter of last 12 months, and so they said that they had made provisions to guard against future loan losses.

All year long, higher borrowing rates have been taking a toll on the housing market, one other area where Fed policymakers search for evidence of a slowing economy. Recent data to be released this Thursday will probably show a continued downturn. Analysts expect existing-home sales to fall for the eighth consecutive month, mirroring the string of declines throughout the housing market crash that helped set off the 2008 financial crisis. Also on Thursday, Freddie Mac, the mortgage finance giant, is anticipated to report that rates on 30-year mortgages have surpassed 7 percent — one other data point not seen since 2008. Rising mortgage rates are one reason for the cooling market, but broader uncertainty in regards to the economy can also be an enormous contributor. Many would-be home buyers could also be spooked by aspects like recent hiring freezes at major firms and stubbornly high inflation numbers — not to say the sticker shock of house prices.

The trail ahead for a deal that will merge the country’s two largest food market chains is more likely to be a bumpy one, inviting intense scrutiny from regulators and powerful objections from consumer advocates. On Friday, Kroger announced plans to accumulate Albertsons, valuing the corporate at $24.6 billion including debt, in a bet that one super-supermarket chain could higher compete with Walmart and Amazon. The businesses said they intended to sell a few of their 5,000 stores to competitors and would consider turning as many as 375 stores right into a separate stand-alone company. But those plans may do little to persuade the Federal Trade Commission, which, under the leadership of Lina Khan, has made it a top priority to tamp down corporate consolidation. Investors appeared to anticipate difficulties for the deal, selling shares of each Kroger and Albertsons on Friday.

In July, Netflix reassured shareholders that it might add a million subscribers within the third quarter, hoping to make up for painful losses this 12 months. In the primary quarter, the streaming giant lost 200,000 subscribers; in the following quarter, some 970,000. On Tuesday, in its latest earnings report, Netflix will share whether it met its goal. If it hasn’t, the corporate may point to its plans to roll out a less expensive ad-supported option next month. The brand new tier will cost $6.99 a month — compared with $9.99 for essentially the most basic tier and $19.99 for the most costly — and can show viewers 4 or five minutes of ads per hour of streaming they watch. The hope is to herald latest customers, especially younger viewers, and to influence individuals who could also be using the passwords of friends or relations to purchase their very own subscriptions.

In an effort to calm markets, Liz Truss, the British prime minister, said she would reinstate a scheduled increase in corporate taxes and ousted her finance minister. Google will allow former President Donald J. Trump’s social media app, Truth Social, to look within the Google Play Store. Gannett, the country’s largest newspaper publisher, announced sweeping cost-cutting measures for its newsrooms, citing a troubling economic outlook.

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