The Labor Department's August Consumer Price Index report showed core prices rising faster than economists predicted, a result that puts the Federal Reserve on a near-certain path toward another interest rate hike. Consumer prices jumped 0.4 percent in August compared with July, matching what forecasters expected for the headline number. But the detail that matters […] The post August consumer prices climb 3.4 percent as core inflation beats forecasts, raising pressure on the Fed appeared first on American Almanac .
The Labor Department's August Consumer Price Index report showed core prices rising faster than economists predicted, a result that puts the Federal Reserve on a near-certain path toward another interest rate hike. Consumer prices jumped 0.4 percent in August compared with July, matching what forecasters expected for the headline number. But the detail that matters most landed above the consensus: core prices, which strip out volatile food and energy costs, rose 0.3 percent for the month. Economists had forecast a 0.2 percent increase. That one-tenth-of-a-point miss carries real weight heading into next week's Fed meeting, because core inflation is the gauge policymakers watch most closely when deciding whether to tighten the screws on…Open
AI:Financial markets and the White House have responded positively to the July consumer price index report, which shows a favorable trend in core inflation figures. As retail sales face unexpected slumps and consumer sentiment fluctuates amidst shifting economic messaging, this cooling of inflation provides much-needed relief for market stability following recent volatility surrounding shifts in Federal Reserve leadership and labor statistics oversight.Open
Data: AAA ; Chart: Axios Visuals The price of diesel fuel has surged above $5 a gallon in the U.S., the highest in four years, creating new inflationary pressure on anything Americans buy that relies on truck transport — which is to say, pretty much everything. Driving the news: The average retail price of a gallon of diesel was $5.04 Tuesday, AAA says, up from $3.65 a month ago. - That amounts to a 38% one-month rise in the price of diesel, surpassing even the 30% rise in the price of regular unleaded gasoline over that span. - The Iran war has choked off supplies of crude oil and other commodities from the Persian Gulf, driving up global prices. State of play: Most Americans have little direct exposure to diesel prices;…
The Federal Reserve will almost certainly hold rates steady, but fresh economic projections and other communications due out Wednesday afternoon will show how the central bank is absorbing two uncomfortable realities at once. Why it matters: The energy shock from the Iran war adds a new factor to the Fed's complicated calculus. Inflation is running hotter than expected, even before the war's impact materializes in the data. Labor market data has been grim, and it's unclear how a sustained oil shock could weigh more heavily on the economy. - Whatever the projections show will set the table for Fed chair Jerome Powell's successor, Kevin Warsh. What they're saying: "The new dot plot likely will indicate that most members retain a bias to…