US Inflation Accelerates for Second Straight Month
US inflation rose 3.7% in August compared to last year, accelerating for the second consecutive month. In July, year-over-year inflation rose 3.2%, while monthly inflation was up 0.2% compared to 0.6% in August....
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Facts
- US inflation rose 3.7% in August compared to last year, accelerating for the second consecutive month. In July, year-over-year inflation rose 3.2%, while monthly inflation was up 0.2% compared to 0.6% in August.1
- The Dept. of Labor’s Consumer Price Index (CPI) — which measures the costs of various goods and services — on Wednesday showed rising energy and gasoline prices, which were the main contributors to the rise in inflation.2
- Although inflation has risen because of a 5.6% rise in energy prices and a 10.6% increase in gasoline, core inflation – a key figure that excludes volatile food and energy prices – rose 4.3% from a year ago and 0.3% since July.3
- These numbers come after the Federal Reserve hiked interest rates to 5% in an attempt to cool the economy. At least one more rate increase could potentially occur in the coming months based on the new data.4
- Fed chair Jerome Powell has said the economy still “has a long way to go” in its effort to get inflation to 2%.5
Sources: 1NBC, 2CNN, 3CNBC, 4Reuters and 5Abc news.
Narratives
- Establishment-critical narrative, as provided by Zerohedge. The economy is not working for the working-class American consumer, and the Fed’s interest rate hikes — which slow wage growth and make mortgage rates explode — haven’t done enough to slow inflation. Hardworking Americans and small businesses are being hit hardest and can't see a way out under current policy.
- Pro-establishment narrative, as provided by Katu. This report is overall positive news for the economy, even if the inflation was a little higher than hoped. Core inflation is slowing and the economy is trending up, so the Fed’s policy is working as intended.