The U.S. annual inflation reaccelerated in August, climbing to 3.7 percent, up from 3.2 percent in July. This was also hotter than the consensus estimate of 3.6 percent.
The monthly consumer price index (CPI) rose sharply by 0.6 percent, triple from the previous month. This matched economists’ expectations.
Core inflation, which eliminates the volatile energy and food sectors, came down to 4.3 percent year-over-year, from 4.7 percent in July. This, too, matched the market forecast. Core CPI rose 0.3 percent, up from 0.2 percent.
The most significant increases in the August CPI?
Beef and veal: 1.2 percent
Gasoline: 10.7 percent
Motor fuel: 10.7 percent
Transportation services: 2.0 percent
Airline fares: 4.9 percent
So, the next major inflation reading, which doesn’t seem as sexy as the CPI, is the producer price index (PPI). This has become a notable inflation metric for market observers because producer prices typically lead consumer prices.
Despite the upward shift in inflation for the second consecutive month, economists anticipate the Federal Reserve will leave interest rates alone at this month’s Federal Open Market Committee (FOMC) policy meeting.
Leave a Comment