U.S. inflation cools further in August, clearing path for rate cuts to begin – National [Video]

U.S. consumer prices rose marginally in August, but underlying inflation showed some stickiness, which could discourage the Federal Reserve from delivering a half-point interest rate cut next week.

The consumer price index increased 0.2 per cent last month after climbing 0.2 per cent in July, the Labor Department’s Bureau of Labor Statistics said on Wednesday. In the 12 months through August, the CPI advanced 2.5 per cent. That was the smallest year-on-year rise since February 2021 and followed a 2.9 per cent increase in July.

Economists polled by Reuters had forecast the CPI gaining 0.2 per cent and rising 2.6 per cent year-on-year. Though inflation remains above the U.S. central bank’s two per cent target, it has slowed considerably, allowing policymakers to focus more on the labor market in their quest to sustain the economic expansion.

Government data last week showed nonfarm payrolls increasing below expectations in August but the unemployment rate falling to 4.2 per cent from near a …