WASHINGTON: The US Labour Department reported Tuesday that the country’s consumer inflation in August surged 8.3 per cent from a year ago, slightly down from the previous month but still at an elevated level, warranting another big rate hike by the Federal Reserve, reported Xinhua.
The Consumer Price Index for All Urban Consumers (CPI-U) ticked up 0.1 per cent in August on a seasonally adjusted basis after being unchanged in July, according to the department’s Bureau of Labor Statistics.
The June CPI of 9.1 per cent marks the largest 12-month increase since the period ending November 1981. In July, the CPI soared 8.5 per cent. The latest data indicates that inflation might be easing amid the Federal Reserve’s interest rate hikes.
Despite that, the CPI has remained over 8 per cent since March, a stark reminder that the Fed has a long way to go to bring elevated inflation under control.
The modest 0.1 per cent month-over-month gain “masks what was a disappointing report,“Sarah House and Michael Pugliese, economists at Wells Fargo Securities, wrote in an analysis.
“While headline inflation was kept in check by falling gasoline prices, core inflation increased 0.6 per cent over the month,“ House and Pugliese noted.
The latest inflation report showed that the so-called core CPI, which excludes food and energy, rose 0.6 per cent in August following a 0.3-per cent rise the prior month. Core CPI jumped 6.3 per cent over the last 12 months, a larger increase than the 5.9-per cent increase for the 12 months ending in July.
The energy index fell 5.0 per cent over the month, after a decline of 4.6 per cent in July and a surge of 7.5 per cent in June. Even with the recent drop, the energy index rose 23.8 per cent over the past 12 months.
The food index rose 0.8 per cent over the month after growing by 1.1 per cent in July, marking the smallest monthly increase since December 2021. The food index increased 11.4 per cent over the last year, the largest 12-month increase since the period ending May 1979.
The central bank raised its target federal funds rate by a quarter percentage point from near zero in March, beginning its tightening cycle to curb surging inflation. In May, the Fed increased the rate by half a percentage point. It lifted the rate by three-quarters of a percentage point in June and July, the most aggressive hikes in decades.
As core CPI continues to advance at a rate far beyond the Federal Reserve’s 2 percent inflation target, a 75-basis-point rate hike at next week’s policy meeting “seems all but assured” at this point, said House and Pugliese. - Bernama