The post-pandemic spike in U.S. inflation eased further last month as year-over-year price increases reached a three-year low, clearing the way for the Federal…
Consumer prices rose 2.5% in August from a year earlier. It was the fifth straight annual drop and the smallest such increase since February 2021.The post-pandemic spike in U.S. inflation eased further last month as year-over-year price increases reached a three-year low, clearing the way for the Federal Reserve to cut interest rates next week.
A key reason for last month's drop in overall inflation was the third decline in gas prices in the past four months: Average gas prices fell 0.6% from July to August and are down 10.6% from a year ago. Used cars fell 1% last month. Measured from a year earlier, used car prices have tumbled 10.4%. Federal Reserve officials have signaled that they’re increasingly confident that inflation is falling back to their 2% target and are now shifting their focus to supporting the job market, which is steadily cooling. As a result, the policymakers are poised to begin cutting their benchmark interest rate from its 23-year high in hopes of bolstering growth and hiring.
The latest inflation figures could inject themselves into the presidential race in its final weeks. Former President Donald Trump has heaped blame on Vice President Kamala Harris for the jump in inflation, which erupted in early 2021 as global supply chains seized up, causing severe shortages of parts and labor. Harris has proposed subsidies for home buyers and builders in an effort to ease housing costs and backs a federal ban on price-gouging for groceries.
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