Inflation Rose to 2.9% in August

New York, NY, September 11, 2025-“Consumer prices were up 2.9% in August from a year earlier, the Labor Department said Thursday, hotter than July’s gain of 2.7%,” reports the Wall Street Journal.

“That matched the 2.9% rise expected by economists surveyed by The Wall Street Journal.

“The year-over-year reading was the highest since the start of 2025.

“Prices excluding food and energy categories-the so-called core measure economists watch in an effort to better capture inflation’s underlying trend-rose 3.1% over the past 12 months, matching forecasts.

“Prices rose 0.4% in August from a month earlier on a seasonally adjusted basis, above expectations of a 0.3% gain. So-called core prices were up 0.3% in August from a month earlier, matching expectations.

“U.S. stock futures pared their gains after the report came out.

“The flagging jobs market all but guarantees that the Federal Reserve will cut interest rates when officials meet next week. But policymakers are also concerned that President Trump’s tariffs could cause inflation to rev up again. A sustained uptick in inflation could lead them to be more cautious about future cuts.

“Consumers are bracing for prices to go up. Median inflation expectations for the coming year ticked up 0.1 percentage point to 3.2% in August, according to a survey released this week by the New York Fed. That is below what they expected it would be in the spring, when Trump first announced many of the tariffs. 

“But the overall inflation picture in the first six months of the year wasn’t as ugly as many feared it would be in the wake of the tariff increases. The Trump administration has said that tariffs won’t increase inflation and will make America wealthier.”