The barrel of oil reached 110 dollars this Friday, while diesel prices in the United States hit another record by rising above six dollars as an effect of the Iran war unleashed by President Donald Trump, which impacts the pockets of Americans.
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However, these data are not part of the inflation data for August, when the cost of a wide variety of goods and services continued to rise in August, according to the report published on Friday. It has every potential to be the decisive factor in determining whether the Federal Reserve raises interest rates next week, as many analysts bet, and whose top Fed official, Kevin Warsh, left the door open a couple of weeks ago, against his backer, President Trump, who continues to push for a drastic cut.
The Consumer Price Index (CPI) rose 0.4% last month, bringing the year-on-year increase to 3.4%, the Bureau of Labor Statistics said. Both figures were in line with the Dow Jones consensus. It is the same percentage as in July, when it fell one-tenth from 3.5%.
In all cases, the figure is much higher than the 2% target set by the United States central bank and well above that left by the previous U.S. president, Joe Biden. Trump campaigned against his predecessor’s administration for the high cost of the shopping basket and made it his main electoral argument.
Excluding the more volatile prices of food and energy, the core CPI recorded a monthly increase of 0.3%, 0.1 percentage points above expectations. The year-on-year core rate stood at 2.4%, in line with estimates and below July’s 2.5%.
This report is the last major inflation indicator the Federal Reserve will know before holding its monetary policy meeting next week, which will conclude on Wednesday with a vote on its main interest rate. The result only adds pressure for the Fed, after five meetings without touching this rate, set in the range between 3.25% and 3.5%, to apply something as unexpected a few months ago as a hike.
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Energy prices pushed the overall figure higher, as gasoline rose 3.9%, representing more than a third of the index increase. The energy value as a whole rose 2.1%, amid pressure from the escalation of tensions in the Middle East, and increased 16.3% compared to the previous year.
Food prices rose slightly, by 0.1%, while the cost of food consumed at home remained stable. The food index accelerated 2.7% year-on-year.
Another important factor was the 0.3% increase in housing costs, which had moderated during the previous two months. Transportation services rose 0.5%. Prices for used cars and trucks rose 0.4%, while new vehicle prices increased 0.3%, as part of what appeared to be a widespread increase in the index.
The report also showed several other areas that are weighing on consumers. Airfares rose 2.7% in August and the index measuring the price of communication services increased 2.3%.
The data had little impact on bond yields, which had already risen considerably this week. Stock futures also barely changed, while S&P 500 futures rose 0.6%. Nasdaq 100 futures advanced 0.8%.
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