The lowest figure since February 2021. The US consumer price index (CPI) stood at 2.5% over one year in August, which implies a slowdown of four tenths compared to the previous data and its lowest figure in more than three years, as reported this Wednesday by the Bureau of Labor Statistics of the Department of Labor.
The core CPI in the United States, which excludes food and energy prices from its calculation due to their greater volatility, closed the eighth month of 2024 with an increase of 3.2%, unchanged and the lowest mark since April 2021.
For its part, food products became 2.1% more expensive over a year, while energy was 4% cheaper in August than twelve months earlier.
In monthly reading, the general rate of the index increased by 0.2%, identical to that of July, while the underlying rate increased by a tenth and advanced by 0.3%.
Markets are paying attention to the August data as it could provide clues about the normalization of monetary policy by the US Federal Reserve (Fed), even though the Fed’s preferred variable for monitoring the cost of living is the personal consumption expenditure (PCE) price index.
The Fed’s Federal Open Market Committee (FOMC) decided in late July to keep interest rates within the target range of 5.25% to 5.5%, their highest level since January 2001.
In its statement, the entity stressed that in considering any adjustment to the federal funds rate, the Committee would carefully assess incoming data, evolving outlooks, and the balance of risks.
“The Committee does not believe that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving steadily towards 2%,” it said.
However, the US central bank stressed that inflation had declined over the past year and acknowledged “progress” in recent months, but also that inflation remained “somewhat elevated.”
The FOMC said risks to achieving its employment and inflation goals had shifted toward a more balanced outlook, while warning that the economic outlook was “uncertain” and that it remained closely monitoring inflation and employment risks.
