US inflation rises below expectations in August; consumer spending robust
WASHINGTON — U.S. inflation increased less than expected in August and price pressures were more moderate in the prior month than previously reported, likely reducing the urgency for the Federal Reserve to raise interest rates again in October. Another rate hike this year, however, remains on the table as the report from the Commerce Department on Wednesday showed consumer spending surging last…
In August, U.S. inflation rose slightly less than anticipated, with price pressures easing compared to a previously reported figure, potentially reducing the need for another interest rate hike by the Federal Reserve in October, according to a report from the Commerce Department.
Despite this, a further interest rate increase this year remains a possibility, as consumer spending in the previous month surged. The U.S. economy has been able to withstand challenges from the ongoing US-Israeli conflict with Iran, which has led to record-high diesel prices due to rising energy costs.
Financial markets have adjusted their expectations for a rate increase next month in light of the less-dramatic price data for August. However, with inflation still elevated and consumer spending and the overall economy remaining robust, senior economist Sal Guatieri from BMO Capital Markets expects another interest rate hike by the end of the year.
The less-than-feared inflation figures for August may provide the Fed with additional time to gather more data before deciding on any further actions, potentially pushing the decision to October 28.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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