US Consumer Prices Rise by Less Than Forecast in August

Consumer prices across the US rose by less that expected in August, suggesting that inflation pressures may be beginning to cool.

According to data published by the Bureau of Labour Statistics on Tuesday, the CPI rose 0.3% between July and August, marking the slowest monthly acceleration in seven months, while advancing 5.3% from year-ago levels. Core inflation, which does not account for volatile prices of energy and food, rose 0.1% month-over-month, and is up 4% from August 2020. Economists polled by Bloomberg forecast a 0.4% monthly jump in overall CPI, and a 5.3% increase from the previous year.

Despite the less-than-anticipated increase in consumer prices, annual inflation is still sitting at the highest level in nearly 13 years. Much of last month’s price increase was attributed to a jump in energy prices, which rose 2%, as well as food prices, which jumped 0.4% month-over-month. Conversely, used car and truck prices— which up until now have been responsible for sizeable gains in monthly CPI prints— cooled 1.5% in August, while transportation services fell 2.3%.

The latest CPI print comes ahead of next week’s FOMC meeting, during which Fed officials are expected to begin talks on cutting back the Fed’s unprecedented asset buying program. Last month, Fed Chair Jerome Powell revealed that the central bank could initiate a taper as early as this year, but failed to provide a more specific schedule.

Following the CPI report, the US dollar plummeted downward, while gold futures soared past $1,800 per ounce.

Information for this briefing was found via the BLS and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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