August Inflation Report Stalls Disinflation Progress

Yesterday's inflation report for August reinforced Federal Reserve Chair Kevin Warsh's recent observations that progress toward disinflation had stalled over the summer.

The consumer price index (CPI) ticked up 3.4% from a year ago last month, matching the annual pace of growth in July, according to the U.S. Bureau of Labor Statistics.

However, monthly growth of 0.4% in August outpaced the 0.1% rise in July, driven by larger-than-expected gains in core CPI, a measure of underlying inflation that strips out volatile food and energy prices.

Core prices rose 0.3% last month, exceeding the 0.2% forecast by economists surveyed by Reuters, Dow Jones, and Bloomberg.