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August inflation breakdown: Where are prices hitting Americans the hardest?
The Fed needs 3 months of softening inflation data: Jason Katz
UBS managing director and senior portfolio manager Jason Katz provides insight on the market’s response to the Fed on ‘Making Money.’
Inflation rose more than expected in August as the rising cost of food and rent offset a major decline in gasoline prices.
The Labor Department said Tuesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 8.3% in August from a year ago. Prices climbed 0.1% in the one-month period from July.
Those figures were both higher than the 8.1% headline figure and 0.1% monthly decline forecast by Refinitiv economists, a worrisome sign for the Federal Reserve as it seeks to cool price gains and tame consumer demand with an aggressive interest rate hike campaign. Stocks sank on the surprisingly hot report, with the Dow Jones Industrial Average shedding more than 1,000 points on Tuesday afternoon.
So-called core prices, which strip out the more volatile measurements of food and energy, climbed 6.3% from the previous year, above the 6.1% forecast from economists. Core prices also rose more than expected on a monthly basis, jumping 0.6% in August – a bigger increase than in April, May, June and July, and a troubling sign that underlying inflationary pressures in the economy remain strong.
AMERICANS' INFLATION EXPECTATIONS DROPPED AGAIN IN AUGUST, NEW YORK FED SAYS
"The August CPI report indicates that inflation is still roaring hot," said Jason Reed, an assistant chair and professor of finance at the University of Notre Dame's Mendoza College of Business. "Economists were hoping for a cool down during August and they saw that with significant declines in the price of gasoline and energy, but food and healthcare prices remained high."
Here's a breakdown of where Americans are seeing prices rise the fastest — and where there has been some reprieve from higher inflation — as they wrestle with sticker shock for the first time in a generation: