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   US inflation rose a surprisingly stiff 3.7% in August as prices at the gas   
   pump surged, adding pressure on the Federal Reserve as it weighs   
   additional rate hikes this fall to tamp down prices.   
      
   The Consumer Price Index — a closely-watched measure of inflation that   
   tracks changes in the costs of everyday goods and services — rose 0.6% in   
   August versus a month earlier, according to data by the Bureau of Labor   
   Statistics released Wednesday.   
      
   August’s acceleration is a 3.7% increase from 2022 — slightly ahead of the   
   3.6% increase that economists had expected, according to FactSet.   
      
   The latest number represents a stark slowdown from last summer when   
   inflation hit a four-decade peak at 9.1%. Still, it remains well above the   
   Fed’s 2% goal and marks an acceleration from the previous two months. In   
   June, inflation bottomed out at 3%, and rose to 3.2% in July,   
      
   “Ultimately this release showed that there is still real work to be done   
   to get inflation back to the Fed’s 2% target,” said Sam Millette, a fixed   
   income strategist for Commonwealth Financial Network.   
      
   Millette predicted that “the higher-than-expected consumer inflation in   
   August is not expected to lead to a rate hike at the Fed’s meeting next   
   week.”   
      
   As Wall Street expected, rising gasoline costs were the main culprit of   
   August’s advance, ticking 10.6% higher last month and accounting for over   
   half of the increase, the data showed.   
      
   As of Wednesday, the national average for one gallon of gas is $3.85,   
   according to AAA figures — two cents less than a month ago and four cents   
   less than a year ago as oil prices hit a 10-month high.   
      
   “Pump prices appear to be defying the odds at the moment, despite the   
   surge in the cost of oil,” said AAA spokesperson Andrew Gross.   
      
   The energy index rose 5.6% in August after increasing just 0.2% in July,   
   the Bureau of Labor Statistics said.   
      
   Food prices rose 0.2% for the third consecutive month as the index for   
   meats, poultry, fish, and eggs advanced 0.8% in August. The index for pork   
   edged 2.2% higher.   
      
   Greg McBride, the Chief Financial Analyst at Bankrate, called the easing   
   price pressures in food costs “one bright spot.”   
      
   Meanwhile, core CPI — which excludes volatile food and energy prices —   
   rose 0.3% from a month ago, slightly more than the 0.2% monthly gain in   
   June and July.   
      
   “Today’s report was a disappointment — not because headline inflation   
   jumped, much of which can be explained by an increase in gas prices, but   
   because core inflation moved higher by 0.3%, which was higher than   
   expected,” said Chris Zaccarelli, Chief Investment Officer for Independent   
   Advisor Alliance.   
      
   “As long as the economy remains resilient and inflation doesn’t re-ignite,   
   the market can rally into year-end, once we get past the seasonally weak   
   months of September and October,” Zaccarelli added.   
      
   Shelter costs remained stubbornly high despite a cooling housing market,   
   likely because of mortgage rates, which are sitting at the highest level   
   since 2001 and forcing many homeowners in major US cities to sell at a   
   loss.   
      
   The shelter index was the largest factor in rising core CPI, increasing   
   0.3% month over month.   
      
   Airline fares, personal care, and new vehicles also contributed to the   
   rise of core CPI, as indexes for motor vehicle insurance also remained   
   particularly strong.   
      
   The indexes for used cars and trucks and recreation decreased last month,   
   the report said.   
      
   The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were each   
   down less than 1% in early trading hours on Tuesday in response to the CPI   
   report.   
      
   Economists are predicting that the slight increase in core inflation over   
   the past three months sets up the Fed to hold interest rates steady next   
   week following the central bankers’ highly-anticipated two-day meeting set   
   for Sept. 19 and 20.   
      
   Whether Fed officials will raise its benchmark federal funds rate beyond   
   its current range — between 5.25% and 5.5% — in November and December   
   still remains up in the air.   
      
   At the Fed’s closely-watched meeting in Jackson Hole, Wyo., last month,   
   Fed Chair Jerome Powell was hawkish in his tone on the still-stubbornly   
   high inflation, though he remained vague on future rate hikes.   
      
   “We are navigating by the stars in cloudy skies,” Powell said from Jackson   
   Lake Lodge, noting that Fed officials “will keep at it until the job is   
   done” and the Fed’s 2% inflation goal is reached.   
      
   The central bank has worked to bring down stubbornly high inflation by   
   hiking rates another 25 basis points to a 22-year high last month in hopes   
   of an economic slowdown.   
      
   Though consumers have continued to feel a reprieve from the Fed’s   
   aggressive tightening regime as inflation has eased from its 9.1% peak   
   last June, the labor market has shown surprising resiliency over the last   
   couple of months.   
      
   Employers have only recently begun to slow hiring.   
      
   In August, the economy added 187,000 jobs — the same amount as in July and   
   the lowest number since COVID peaked in 2020.   
      
   In June, 209,000 jobs were added to the labor market, a slowdown from the   
   massive 339,000 jobs added in May.   
      
   The US is currently enjoying a 31-month streak of monthly job gains.   
      
   https://nypost.com/2023/09/13/us-inflation-climbs-3-7-in-august-as-fed-   
   mulls-more-hikes/   
      
   --- SoupGate-Win32 v1.05   
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