The New York City skyline in the United States

United States Inflation August 2023

United States: Inflation increases in August

Inflation came in at 3.7% in August, up from July’s 3.2%, slightly above market expectations of 3.6% and well above the Federal Reserve’s 2.0% target. Looking at the details of the release, a far smaller year-on-year drop in energy prices as the base effect turned less favorable was largely behind the acceleration in inflation.

The trend pointed down, with annual average inflation coming in at 5.4% in August (July: 5.8%). Meanwhile, core inflation fell to 4.3% in August from July’s 4.7%, which was in line with market expectations.

Lastly, consumer prices increased 0.63% over the previous month in August, picking up from the 0.17% increase seen in July. August’s result was the highest reading since June 2022.

On the implications for monetary policy, TD Economics’ Thomas Feltmate said:

“With core inflation continuing to move in the right direction, the labor market slowly coming back into better balance, and term yields having recently surpassed last year’s highs, the FOMC can afford to skip the September meeting and continue to ‘monitor the data’. However, it’s still too soon to know whether the recent easing in inflationary pressures will be fleeting or more long lasting. This should keep the Fed guarded at its upcoming meeting, reinforcing the need for rates to remain ‘higher for longer’ and keeping the possibility of another rate hike in play.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest