No relief from inflation as Middle East clashes lifts fuel prices to painful levels

inflation 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, just like July. But inflation quickened month to month as costs jumped 0.4% from July, quadrupling the 0.1% registered in the previous month.Inflation remains stubbornly elevated more than five years after prices soared as the economy emerged from the pandemic. Friday's report increases pressure on the inflation-fighters at the Federal Reserve to boost their benchmark interest rate next week, which could lift mortgage and auto loan costs in the months ahead.Federal Reserve Chair Kevin Warsh and other Fed officials have signaled they would need to see continuing disinflation to leave rates where they are."Today’s August report did not deliver that,” said Kathy Bostjancic, chief economist at Nationwide.Prices rise across many goods and servicesGasoline prices are not all that is rising.

Prices for appliances, car repairs, and wireless phone services also jumped last month. Yet economists worry that more expensive fuel can spill into other parts of the economy. Diesel prices have hit record highs above $6 a gallon, which pushes up the cost of shipping for groceries and other goods.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 surprising monthly increases in core prices are 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 Thursday.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 GOP keeps a majority in Congress. 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. 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.IN CASE YOU MISSED IT | Oil prices leap to their highest since May and drag Wall Street lowerAirline 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. 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.