The fifth consecutive annual decline paves the way for the Federal Reserve to cut interest rates next week.
Inflation hit a three-year low in August, paving the way for the Federal Reserve to cut interest rates next week.According to the Labor Department, consumer prices rose 2.5% from a year earlier, marking the fifth consecutive annual decline and the smallest increase since February 2021. Monthly price growth from July to August was just 0.2%.Excluding food and energy, core prices—closely watched by economists—rose 3.2% year-over-year, with a monthly increase of 0.3%.
Former President Donald Trump has blamed Vice President Kamala Harris for the inflation surge in early 2021, while Harris has proposed housing subsidies and a federal ban on grocery price-gouging. Trump has advocated for increased energy production to combat inflation.Gas prices played a significant role in August's inflation decline, falling by about 10 cents per gallon. Economists expect slower rises in grocery and rent costs to further ease inflation pressures.
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