The US' inflation report card was just released

If the Consumer Price Index, America’s most widely-used measure of inflation, was a fitness exercise, it would be a burpee – up, then down, then back up again.

According to Labor Department figures published yesterday, US inflation stood at 3.7% over the year-long period ending in August. That’s up from 3.2% in July and 3.0% in June, but down from a recent peak of 9.1% in June 2022.

On a month-to-month basis, the CPI rose 0.6% in August, representing the highest figure in over a year. A large portion of this increase can be attributed to gas prices, which rose 9.1% last month to reach a national average of $3.82/gallon.

• The core index, a separate reading that excludes often-volatile food and energy prices, rose 4.3% in August compared with a year earlier.
• That figure is down from 4.7% in July, and marks the smallest annual increase in core inflation since September 2021.

🏦👀 Looking ahead… There’s still a gap between the current core inflation reading (3.7%) and the Fed’s target rate of 2%. But a majority of economists expect the US central bank to hold off on raising interest rates in its upcoming meeting next week, though future rate hikes in November or December are on the table.