US Inflation Surges to 3.7%

The US Federal Reserve will closely monitor the impact of energy costs on other areas of the economy, such as food prices and inflation rates.

Experts say that if energy costs begin to affect other areas of the economy, it could lead to higher inflation rates in the future.

Higher tariffs - which are levies that businesses pay on the goods they import - directly raise prices for US companies unless the overseas firms they are buying from lower prices to absorb some of the cost.

In response to the new tariffs, the New York Fed found exporters reduced prices very little, meaning US-based businesses ended up absorbing nearly 90% of the cost of the added tax.

Indirectly, higher tariffs also affected the prices of locally made goods, as many US producers rely on parts or materials from overseas.

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It's worth noting that much below 2%, people can delay spending if they expect price rises to slow further, or to fall. That can lead to businesses reducing wages, or reducing the number of workers to cope with lower demand.

The Social Security Administration announced that Social Security benefits including old age, survivors and disability insurance would rise by a similar amount - 3. 6% - in 2027. The administration said that the 3. 6% rise will mean an average retirement benefit increase of $75 a month.

The cost-of-living adjustment will take effect in January for about 72 million people, while increased payments for the 7.2m receiving the supplemental security income will start on 31 December.