Restaurants, other services still in grip of high inflation even as overall rate slows

abcnews.go.com:

While prices for most goods have been falling throughout the year, inflation for a wide range of services remains high

NEW YORK — While prices for most goods have been falling throughout the year, inflation for a wide range of services remains high. That has put a strain on consumers eating out, servicing their cars and paying for various kinds of insurance.

Prices for services rose 3.7% in September from a year ago, according to the personal consumption expenditures price index, the inflation gauge of choice for the Federal Reserve. Prices for goods, though, have been falling, which has helped cool the overall rate of inflation nearly back to the Fed's goal of 2%.

Restaurants, with traditionally tight margins and tough competition for diners' dollars, are among the harder hit sectors dealing with stubborn inflation. Food services inflation rose 3.6% in September. Chains including Chipotle, McDonald's and others say they expect inflation pressure from wages to continue.

Higher wages drive up costs for restaurants, often prompting menu prices to also rise. Pressure from rising wages increased following mandatory increases in minimum wages in California.

McDonald's and other restaurants have tried to attract more cautious consumers with menu deals as the price of eating out rises compared with eating at home.

Home and car insurance inflation also remains stubbornly high. Household insurance premiums were up 10.1% from a year ago, while auto insurance was up 6%. Companies including Allstate and Progressive have said increased storm damage and more costly parts and labor for repairs are keeping prices high.

The housing market, particularly rent, has been one of the biggest drivers of services inflation. Overall housing