US markets sink on unexpectedly high inflation

2022-09-14 10:06:21
US markets sink on unexpectedly high inflation

Inflation in the US remained unexpectedly high last month, news that drove Wall Street to its worst day in more than two years.

Prices rose 8.3% in the 12 months through August, the Labor Department said, faster than the 8.1% that economists had expected that was down from 8.5% in July, driven by lower petrol costs, but the costs of food, housing and medical care continued to surge, disappointing investors.

The Dow Jones Industrial Average sank nearly 4%, the S&P 500 dropped 4.3%, and the Nasdaq plunged more than 5%.

For US President Joe Biden, whose approval ratings fell below 40% earlier this year amid cost of living concerns, the report was also a troubling sign ahead of the national elections in November. They will determine whether Mr Biden's Democrats maintain their slim control of Congress.

While Mr Biden's ratings have recovered slightly in recent weeks as petrol prices have subsided, the issue remains "a huge problem", said pollster Chris Jackson.

For a president with approval ratings like Mr Biden's to see his party pick up seats in the mid-terms would be unprecedented, he added.

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