Inflation Eased to 2.5% in August

Washington, DC, September 11, 2024-The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis, the same increase as in July, the U.S. Bureau of Labor Statistics reported. 

Over the last 12 months, the all-items index increased 2.5% before seasonal adjustment.

The index for shelter rose 0.5% in August and was the main factor in the all items increase. The

food index increased 0.1% in August, after rising 0.2% in July. The index for food away from home rose 0.3% over the month, while the index for food at home was unchanged. The energy

index fell 0.8% over the month, after being unchanged the preceding month.

“Inflation eased in August to new three-year lows, teeing up the Federal Reserve to begin gradually reducing interest rates at a meeting next week.

“The consumer-price index climbed 2.5% from a year earlier, according to the Labor Department, decreasing from 2.9% in July and extending its cooling streak to five months. Core inflation, a measure that excludes volatile food and energy costs, held roughly steady at 3.2%,” reports the Wall Street Journal.

“Economists surveyed by The Wall Street Journal had expected overall inflation to have risen 2.6% from a year ago, as well as a 3.2% increase in core prices.

“Stock futures edged lower after the report. Treasury yields inched slightly higher but hovered near their lowest levels of the year. Traders ramped up bets that the Fed will lower rates by 0.25-percentage-point next week to kick off a widely anticipated rate-cutting cycle to lower borrowing costs across the economy.

“Price increases for housing continued to keep core prices elevated for millions of Americans. Cost increases for food slowed in August, while used vehicles and energy were cheaper than a month earlier. An intensifying selloff in oil markets in recent weeks suggests prices at the pump will continue to decline in the coming weeks, a key reversal in pressures that have colored Americans’ views of the U.S. economy.”