Washington, September 12 (Patrika English News): U.S. consumer prices rose modestly in August, keeping inflation above the Federal Reserve’s 2% target but leaving room for an interest rate cut at next week’s policy meeting.
The Consumer Price Index (CPI) increased 2.9% year-on-year, up from July’s 2.7%, the Labor Department reported Wednesday. Core inflation, which excludes food and energy, held steady at 3.1% for the second consecutive month. Both figures matched economists’ forecasts.
The data follows recent signs of a weakening job market. A New York Fed survey released September 8 showed workers now see just a 44.9% chance of finding a new job if they lose their current one — the lowest reading since the survey began in 2013.
Markets remain confident the Fed will cut rates on September 17. According to the CME FedWatch tool, traders are pricing in a 100% probability of a reduction, with 90% expecting a 25-basis point cut and 10% forecasting a 50-basis point move.
The S&P 500 and Nasdaq hit record highs on September 10, buoyed by cooler wholesale price data. Still, many Americans continue to feel squeezed. Car repossessions are at their highest level since 2009, fast-food spending is declining amid rising prices, and tariffs have pushed coffee costs nearly double over the past five years.
Even with inflation easing, economists note the mix of elevated living costs and softening labor data highlights the fragile balance the Fed faces as it seeks to support growth while keeping prices in check.
