Despite efforts by the Federal Reserve to cool off the U.S. economy, inflation had picked up 0.1% in August. Annualized inflation has climbed 8.3%, which is higher than the 5.2% hourly earnings growth Americans experienced over the same period.
Mark Zandi, chief economist at Moody's, estimates that given current inflation and consumer spending data, Americans are now shelling out $460 more each month than they were a year ago to buy the same goods and services.
Inflation is expected to remain elevated for some time, though it should continue heading downward, according to the most recent New York Federal Reserve survey.
Consumers told the central bank last month they expect the annual inflation rate to be at 5.7% one year from now, far above the Federal Reserve's 2% target. That target range won't be reached for another three years, the New York Fed survey indicated.