Energy bill streak continues

American households are enduring the longest streak of double-digit increases for monthly natural gas and electricity bills in decades, adding stress to cash-strapped budgets already hurt by widespread inflation, according to the U.S. Bureau of Labor Statistics.

Gas bills in September were about 33% higher than a year earlier to chalk up an 18th consecutive double-digit percentage gain, according to Labor Department data.

That’s the longest streak in more than three decades, when a 58-month run of such gains ended in September 1983.

Electric bills, which rose 15.5% last month, are on a seven-month streak of double-digit gains, the longest run in 16 years.

U.S. heating bills are poised to be even costlier, given signs of soaring oil and natural gas prices and cooling temperatures ahead of winter along with disruptions exacerbated by a European energy crisis and Russia’s war in the Ukraine.

Natural gas is the key fuel for many US power plants and homes that rely on oil for heat – such as in the Northeast – may be hit even harder by rising costs.

Rent jumped 0.8% in September

Housing costs shifted into overdrive last month and risk becoming an enduring source of U.S. inflation.

Rent of shelter and owners’ equivalent rent each accelerated 0.8% in September from the prior month, the most since 1990, according to Labor Department data released Thursday.

Both measures posted record 6.7% advances on an annual basis.

That contributed to the biggest year-over-year increase in overall shelter costs, which also includes hotel stays and tenants’ and household insurance, since 1982.

Housing makes up about a third of the overall basket of consumer prices, which rose last month by more than forecast.

It comprises an even larger share of the so-called core CPI, which also exceeded estimates.

The report cited shelter, along with food and medical care, among the largest of “many contributors” to the broad advance in September.

Even excluding rent of shelter, the cost of services still rose at a record annual pace, underscoring the breadth and depth of overall price pressures in the economy.

Stocks surge in spite of inflation news

U.S. stocks roared back from losses sparked by a hot inflation reading on speculation the yearlong selloff had potentially reached a bottom.

The S&P 500 closed up 2.6% after swinging more than 5% during a wild trading day.

The benchmark clawed back more than 40% of the losses over a six-day selloff that took it to a two-year low.

Technical levels factored into the bounce.

At one point, the benchmark S&P 500 had given back 50% of its post-pandemic rally, triggering programmed buying.

A wave of put options bought to protect against such a rout moved into the money, and as profits were booked, that prompted dealers to buy stocks to remain market neutral.

A gauge of consumer price growth rose to a 40-year high last month, sealing the case for the Fed to deliver a large rate hike in November.

Stocks plunged 25% this year before Thursday’s rebound, as the central bank tightened policy to curb inflation, leaving investors to weigh how much damage is left for share prices.

“There may be some short covering going on, but also, a lot was priced in,” said Michael Contopoulos, director of fixed income at Richard Bernstein Advisors.

“There has likely been a fair amount of defensive positioning lately in equities and on the rates side, higher policy rates means higher probability of a hard landing.”

Risk assets have been under pressure all year as central banks around the world attempt to tame runaway inflation.

From wire reportsThe latest data added to evidence the harsh monetary medicine has yet to take hold and comes on the heels of last week’s payrolls figures that showed unemployment rate at a five-decade low in September.

The Treasury curve flattened, with the yield on policy-sensitive two-year notes up 18 basis points at 4.47%.

Market bets on rates now lean toward back-to-back 75 basis-point hikes at the next two Fed meetings and expect the central bank to push rates past 4.85% before the tightening cycle ends. The current rate is 3.25%.

On the earnings front, Delta Air Lines, Domino’s Pizza and Walgreens Boots Alliance gained on better-than-expected results.

Big banks including JPMorgan Chase and Citigroup are due to report on Friday.

Meanwhile, U.K. markets remained in turmoil almost two weeks after the government unveiled a plan to drastically cut taxes.

The pound surged back above $1.13, buoyed by reports that government officials are working on a U-turn of tax cuts. Gilts also rallied, with the yield on 30-year debt dropping as much as 46 basis points.

The yen sank to its lowest level in more than 30 years after the U.S. inflation report, before reversing the move in a whiplash trade that raised market chatter of potential intervention.