U.S. inflation rose slightly in August as companies continued to pass the cost of tariffs onto consumers, reports the Guardian.
The latest update to the consumer price index (CPI), which measures a basket of goods and services, showed that prices increased 2.9% over the last year – the highest since January. Core CPI, which excludes energy and food costs, stayed stable at 3.1%, after going up in July.
However, optimism remains that the Federal Reserve will cut interest rates by a quarter point at the central bank’s board meeting on September 17. President Donald Trump has brought continuous pressure on the Fed to cut rates, but the decision looks likely to be led by fears that the U.S. jobs market is weakening.
Rates currently stand at a range of 4.25% to 5.5%.
The New York Times said price pressures need to stay contained for officials to feel more confident that tariffs will result in only a temporary burst in inflation rather than something more “pernicious.”
Read More: U.S. Tariff Uncertainty Delays the Economic ‘Power’ Lutnick Predicted
Data released in early August painted a troubling picture of the labor market, as initial jobs figures for May and June were revised down by a total of 258,000. The White House quickly blamed the Bureau of Labor Statistics (BLS), the government agency that collects and reports employment data, for the gaps. But the Guardian says economists pointed out that uncertainty introduced by Trump’s tariffs likely caused delays in survey collection.
BBC News reported September 10 that the office of the Labor Department's inspector general said it had launched a probe to look at the "challenges" the BLS faces gathering and updating the information.
