The numbers: A key gauge of U.S. inflation rose a mild 0.3% in August, as another sharp decline in gas prices helped to ease the financial stress on households and businesses. But prices are still going up at the fastest pace in 40 years.

The small increase in the so-called personal-consumption price index last month follows a decline in July. Retreating gas prices were the chief reason.

In a more worrisome sign, another measure of inflation that omits volatile food and energy costs jumped 0.6% last month. That was above Wall Street’s 0.5% forecast for the so-called core PCE.

The Federal Reserve views the PCE index as the best barometer of inflation trends.

Key details: The rate of inflation over the past year slowed a bit to 6.2% from 6.4% in the prior month.

The core rate of inflation in the past 12 months, however, climbed to 4.9% from 4.7%. It had touched a 40-year high of 5.3% in February.

Unlike it’s better-known cousin, the consumer price index, the PCE gauge takes into account how consumers change their behavior in response to higher prices.

They might substitute cheaper goods such as ground beef for more expensive ones like ribeye to keep their costs down. Or stay at a cheaper “airbnb” instead of a hotel.

The CPI showed inflation rising at a 8.3% yearly rate in August.

Big picture: High inflation partly derailed the economy earlier this year. Now soaring interest rates are set to slow the economy even further in the months ahead.

The Fed is jacking up rates to try to rein in inflation , but when the cost of borrowing goes up so much, the economy weakens. Many economists predict the U.S. could sink into a second recession in four years by early 2023.

Market reaction: The Dow Jones Industrial Average

and S&P 500

were set to open lower in Friday trades. Stocks have tumbled the past few weeks in response to higher interest rates and the growing threat of recession.


Source link

You May Also Like

Spokesman slaps politician on live TV in Greece

[ad_1] Spokesman slaps politician on live TV in Greece – CBS News…

Uvalde parents have filed a federal lawsuit against gun manufacturers, the school district and others | CNN

[ad_1] CNN  —  Parents of survivors of the Robb Elementary School massacre…

Michael Cohen says Trump’s downfall will resemble Al Capone’s: ‘You’re not going to get them on murder, extortion, or racketeering. You’re gonna get them on tax evasion.’

[ad_1] Donald Trump.Chip Somodevilla/Getty Images Michael Cohen said he thinks Trump will…

The student loan handout caused ‘clear’ damages for my client: Caleb Kruckenberg

[ad_1] NEWYou can now listen to Fox News articles! Attorney Caleb Kruckenberg…

Teen had been staying with father before mother’s slaying

[ad_1] LOS ANGELES — A Southern California man who was accused of…

Family of Hae Min Lee appealing decision to vacate Adnan Syed’s murder conviction

[ad_1] The family of Hae Min Lee, a Maryland teen who was…