Gas prices fell in September, helping to bring overall inflation down slightly on an annual basis. But those falling prices were not enough to offset month-over-month inflation, which rose 0.4 percent in September.
It remains unclear whether gas prices will continue to fall. Prices at the pump have fluctuated after coming down from a record high this summer.
Gas prices fell 4.9 percent in September, according to data from Thursday’s inflation report. But the cost of gasoline has been creeping up in recent weeks as a result of temporary refinery closures and increased demand after a 98-day streak of declines ended last month. The national average price of gasoline stood at $3.913 on Thursday, according to data from AAA, a 0.2 percent decrease from the day before.
Despite lower gas prices, the overall energy index is still up 19.8 percent over the 12 months through September. Natural gas rose by 2.9 percent in September and electricity rose by 0.4 percent. While the rise in gas prices might be short-lived, energy costs are expected to rise ahead of the winter heating season as demand goes up. The increase in energy prices could pose a challenge for the Federal Reserve by complicating its campaign to lower interest rates to bring down inflation.
Gas prices give experts a sense of how the economy is doing, but they also carry political weight. The lowered gas prices were a key talking point for President Biden, who made claims about the price declines over the summer and accused energy companies of profiteering on American consumers.
“One data point, even if it comes in in a positive way, is not going to derail the Fed from its path of raising rates this year,” said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth.
The Organization of the Petroleum Exporting Countries announced it would slash production by 2 million barrels a day on Oct. 5, a change which might cause prices to shoot up. Still, some analysts pointed out that some members of OPEC are unable to meet production quotas, which might minimize the impact of the cut.
“Consumers should anticipate that gas prices particularly going into the winter months can firm back up again,” Ms. Bartels said.
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October 13, 2022 at 08:07PM
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Gas Prices Fall Slightly, but Overall Energy Costs Are Expected to Rise. - The New York Times
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