A sharp increase in gas prices likely pushed inflation higher in August compared with a year ago, yet a measure excluding energy and food costs is expected to fall for the fifth straight month, suggesting that the Federal Reserve’s interest rate hikes are still bringing down prices for many goods an
“The longer-run trend is coming down,” said Alan Detmeister, an economist at UBS and former staff economist at the Fed. “There is month-to-month noise ... But we’re on the right track.”a rare “soft landing,”
On a monthly basis, consumer prices likely jumped 0.6% in August, the biggest increase in more than a year. Gas prices spiked about 11% in August, economists estimate, though they have since levelled off: According to AAA, the average nationwide price at the pump was $3.84 on Tuesday, little changed from a month ago.
Grocery prices are increasing more slowly after skyrocketing in the wake of supply disruptions brought on by Russia’s invasion of Ukraine last year. The increase has strained many households’ budgets. Even with more modest increases each month, grocery costs are still 3.6% higher than a year ago. The Fed has lifted its benchmark interest rate 11 times in the past 12 meetings to about 5.4%, the highest level in 22 years. It increased the rate a quarter-point in July after leaving it unchanged in June.
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