In August, annual inflation in America fell for the fifth month in a row, and at the same time was the lowest since February 2021.
This time, the annual price pressure decreased from 2.9 to 2.5 percent, which corresponded to the forecast average. True, here is the basic indicator, which is calculated without including changes in the prices of food and energy resources, remained stable and amounted to 3.2 percent, but that is what economists were waiting for.
The consumer price index increased by 0.2 percent during the last month of the summer, or the same as in July and the same as expected. In the case of the base case, a 0.3 percent increase was recorded, while it was predicted that it would reach 0.2 percent, just like the month before. Prices grew mainly due to the 0.5 percent increase in housing rent. Food prices rose by only 0.1 percent, clothing prices by 0.3 percent, energy resources by 0.8 percent, used vehicles by one percent, and medical services by 0.1 percent.
Energy costs fell 4 percent year-over-year, compared to a 1.1 percent increase in July, driven mainly by gasoline (-10.3 percent, versus -2.2 percent), fuel oil (year-over-year price declines increased from 0.3 percent to 12.1 percent), and natural gas (year-over-year price declines 0.1 percent, when an increase of 1.5 percent was recorded in July).
In America, the annual increase in food prices (from 2.2 to 2.1 percent) and transportation (from 8.8 to 7.9 percent) also decreased during the month, while the prices of new vehicles (from -1 to -1.2 percent) fell even more, as used cars and trucks contracted by 10.4 percent during the year, and by 10.9 percent the month before.
On the other hand, the annual price increase of housing rent increased, ie from 5.1 to 5.2 percent, and of clothes – from 0.2 to 0.3 percent.
After the August inflation data was released to the market, the probability that the Fed will cut the interest rate next week by only 25 basis points rose to as much as 92 percent. Meanwhile, expectations that they will be cut fell twice as much from 34 to 8 percent.