Rent in the U.S. rises, prices in Korea rise again, Chang-yong Lee ‘falls’

Rent in the U.S. rises, prices in Korea rise again, Chang-yong Lee ‘falls’

In the United States, rents have risen sharply while inflation has stagnated, and in Korea, inflation is on the rise again, but Bank of Korea Governor Lee Chang-yong said, “It has fallen at a faster rate compared to other countries.”
The U.S. Department of Labor's September Consumer Price Index (CPI) rose 0.4% from the previous month and 3.7% from the same month last year, but rents rose 0.6% from the previous month and surged 7.2% from the same month last year.
The Korea National Statistical Office's September consumer price index was 112.99 (2020 = 100), up 3.7% from the same period last year, returning to April's 3.7% after 5 months, showing the highest rate of increase.
The Bank of Korea and the Korean government have calculated inflation by excluding the cost of own housing reflected in the U.S. and Japan in the consumer price index and set it 20-30% lower than the U.S. level.
Regarding the surge in U.S. rents, the AP said, “The main driver of inflation last month was the rise in housing costs,” and “Rental prices and the government’s measure of the cost of homeownership account for about a third of the total inflation index, and the inflation rate increased from August to September. They accounted for the majority of overall inflation, and these costs also accounted for more than two-thirds of core price increases compared to a year ago.”
On the 10th, just before the Israeli war, the International Monetary Fund (IMF) lowered its forecast for next year's global economic growth rate and significantly raised its forecast for the consumer price increase rate to 6.9%, up 0.1 percentage points from last July, and its forecast for next year was 5.8%, three months later. was adjusted upward by 0.6%p.
In particular, the IMF lowered its growth forecast for next year by 0.1% in three months from 3.0% to 2.9% in its World Economic Outlook.
Bank of Korea Governor Lee Chang-yong, who attended the IMF meeting, said in a CNBC interview on the 11th that Korea's prices have fallen at a faster rate than other countries, and that the inflation rate will fall to around 3% by the end of this year and approach next year's target level (2%). “It will be possible,” he said, and regarding core inflation, “3.3% has been maintained for three months.”
According to the National Statistics Portal of the National Statistical Office, the consumer price index for sugar last month was 141.58, a 16.9% increase from the same month last year, and the salt inflation rate was 17.3%, the highest rate of increase since August of last year (20.9%).
The inflation rate peaked at 6.3% in July of last year, but petroleum prices fell 4.9% from a year ago, falling for eight consecutive months to 2.3% in July, but turning upward again in September without an increase in oil prices.
Petroleum products fell for eight consecutive months, with the rate of decline decreasing to -25.9% in July, -11.0% in August, and -1.1% in September. Agricultural, livestock and fishery products rose 3.7% in September, up 1.0% from 2.7% in the previous month. p increased, and the agricultural products surged 7.2%, increasing the increase from the previous month's 5.4% increase.
Kim Woong, Deputy Governor of the Bank of Korea, said on the 5th, "The consumer price inflation rate will continue to slow again from October and will be around 3% by the end of the year."
Deputy Prime Minister Chu Kyung-ho said at the emergency economic ministers' meeting on the 5th, "While the slowdown in service prices, which has been a major factor in the rise in prices, continues, the core inflation rate, which shows the trend of prices, is also maintained in the low 3% range." Starting next month, prices will increase. “It will stabilize again,” he said.
Laura Rosner-Warburton, chief economist at MacroPolicy Perspectives, said U.S. inflation to AP on the 13th, “suggests we have emerged from the higher inflation regime of the pandemic, but is still rising,” adding, “Fed officials are expected to change interest rates at their next meeting in three weeks.” It is expected that this will not be the case, so it will be the highest at 5.4%, but he predicted a further increase, saying, "We will leave the door open for further increases in the future, including the next meeting in December."
Rising housing costs, the main driver of U.S. inflation, accounted for most of the total inflation from August to September, accounting for about a third of the total inflation index in rental prices and the government's measure of the cost of homeownership.
U.S. rental costs accounted for more than two-thirds of core price gains compared to a year ago, with rents rising 0.5% on a monthly basis for the second straight month and year-over-year rents rising 7.8% in September, up from a 7.4% increase in August. did.
On the 12th, when the US consumer goods index was announced, most Korean media reported that interest rates were expected to be frozen.