Newzinflation accelerated last month as gas prices spiked in the wake of renewed fighting in the Middle East, underscoring the affordability challenges that are top of mind for many voters with midterm elections now just seven weeks away.The consumer price index rose 3.4% last month compared with a year ago, the Labor Department said Friday, the same as in July. But on a monthly basis, inflation quickened, as costs jumped 0.4% from July to August, up from an increase of just 0.1% the previous month.The figures show that inflation remains stubbornly elevated, more than five years after prices first soared as the economy emerged from the COVID pandemic. Friday's report increases pressure on the inflation-fighters at the Federal Reserve to boost the benchmark interest rate at a meeting next week, which could lift mortgage and auto loan costs in the months ahead.Federal Reserve Chair Kevin Warsh and other officials “signaled that interest rates can remain on hold only if disinflation continues and today’s August report did not deliver that,” said Kathy Bostjancic, chief economist at Nationwide.Worsening inflation isn't all due to spiking gas costs.
Prices for appliances, car repairs, and wireless phone services also jumped last month. And economists worry that more expensive fuel can spill into other parts of the economy. For example, diesel prices have hit record highs above $6 a gallon, which pushes up the cost of shipping for groceries and other goods delivered by truck.Airline tickets rose 2.7% on a monthly basis, according to the new data, and have soared more than 23% from a year earlier.Excluding the volatile food and energy categories, core prices were 2.4% higher in August than a year ago, down slightly from July's 2.5% and the third straight decline.
But on a monthly basis, core prices rose 0.3% from July to August, the largest increase since April.The larger-than-expected monthly increase in core prices will likely embolden those Fed officials who have pushed for higher interest rates. Wall Street investors now see a more than 80% chance that the Fed will increase rates Sept. 16, according to CME Fedwatch, a 10-point jump from yesterday.The Trump administration is seeking to counter voter concerns about high prices and rising interest rates.
President Donald Trump on Wednesday promised $5,000 payments to every American adult if the… Persistent inflation has presented a major challenge for the inflation-fighters at the Federal Reserve and has soured many voters on the Trump administration’s economic track record.Excluding the volatile food and energy categories, core prices were 2.4% higher in August than a year ago, down slightly from July's 2.5% and the third straight decline. Wall Street investors now see about 70% likelihood the Fed will increase rates Sept.
16, according to CME Fedwatch.The Trump administration is seeking to counter voter concerns about high prices and rising interest rates as the midterm elections approach. And Treasury Secretary Scott Bessent has stepped up buybacks of Treasury bonds in an effort to keep longer-term interest rates lower. Yet on Thursday the yield on the 10-year Treasury reached a nearly three-year high.Renewed fighting in the Middle East has pushed up energy costs, with the nationwide average cost of a gallon of gas on Friday jumping more than 7% from a month ago to $4.30.Hotel room prices and airfares also rose last month while new and used cars got more expensive.
Apparel and grocery prices were unchanged from July to August.Inflation as one-time shock, or something moreMany economists and… But on a monthly basis, inflation accelerated, as costs jumped 0.4% from July to August, up from an increase of just 0.1% the previous month.The figures show that inflation remains stubbornly elevated, more than five years after prices first soared as the economy emerged from the COVID pandemic. AP’s earlier story follows below.WASHINGTON (AP) — Friday's inflation report is shaping up to be among the most consequential in years.Oil and gas prices have spiked again on the back of renewed combat in the Middle East.
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