United States: Inflation comes in at highest level since January in August
Latest reading: Inflation inched up to 2.9% in August, following July’s 2.7%. August’s reading represented the highest inflation rate since January, but was in line with market expectations. Looking at the details of the release, food and transport price pressures rose at a quicker pace in August compared to the previous month.
The trend pointed up slightly, with annual average inflation coming in at 2.7% in August (July: 2.6%). Meanwhile, core inflation was steady at July’s 3.1% in August, also in line with market expectations.
Lastly, consumer prices rose 0.38% from the previous month in August, picking up from July’s 0.20% increase. August’s figure marked the highest reading since January.
Panelist insight: On the data and outlook, TD Economics’ Thomas Feltmate said:
“Inflationary pressures continued to heat up in August, with broad strength in goods and services inflation. Goods prices are likely to continue to drift higher over the coming months as businesses increasingly pass-on more of the tariff costs. However, further upward pressure on services inflation looks limited against the backdrop of a cooling labor market which is likely to limit upward pressure on wage growth and keep a lid on discretionary services spending.”