Consumer price growth increased in August, the labor statistics office reported Thursday. It is the last indication that the US economy continues to fight with inflation, even when the labor market cools.
The broadest measure of price growth increased 0.4% last month after 0.2 percent increase in July and above 0.3% estimates. On a base of 12 months, the index rose by 2.9% compared to 2.7% in July. It is the highest reading since January.
Excluding food and energy prices, which tend to be more volatile, prices growth reached 3.1% in 12 months, the highest figure since February and the third consecutive month that this rate has increased.
Some of the greatest price increases seen in the month were in the prices of cars and used trucks and transport services, which include air tickets, both 1%higher.
Thursday’s report complicates the current economic image. On Wednesday, the BLS said that the growth of wholesale prices for August that was softer than estimates, since companies ate higher costs. That led some analysts to conclude that inflation may not be as worrying as it was feared. The report consolidated bets for a rate cut by the Federal Reserve when it meets next week.
The attention of economists, otherwise, has resorted to the weakening labor market. Last week, the BLS reported that the United States added only 22,000 jobs in August. Weekly unemployment claims reached 263,000 on Thursday, more than expectations. Salaries also slowed too. From July to August, profits fell 0.1% after inflation, suggesting that prices are increasing faster than profits, according to new government data. If the short Fed is probably due to worries about the work.
President Donald Trump has insisted that there is no “inflation” and that the Fed should have cut a long time ago. In a note for customers before Thursday’s launch, Citi Financial Group analysts said that the weak demand for consumers and “almost zero employment growth” have created an “deflationary” economic backdrop “curtain, which means that the inflation rate is cooling.
Bond investors have also indicated that they see a cooling economy, after having sent the 10 -year treasure note to the minimums not seen in April. Treasury performance represents the yield required by investors to provide the government, and when inflation expectations are submitted and the demand for bonds increases, the performance falls. Mortgage rates have also decreased.
However, stocks continue to go beyond expectations for a tariff cut. The profits of the companies tend to increase if they do not have to pay so much to request money, assuming that the demand is stable. The futures were higher at 8:40 am et on Thursday.
