Core Inflation Holds Firm Ahead of Fed Meeting

The latest Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics shows that core inflation remains above the Federal Reserve's target, potentially leading to an interest rate hike at their meeting next week.

The CPI for all items rose 0.4% month-over-month in August, with a 3.9% jump in gasoline contributing to over one-third of the monthly increase. The energy index increased by 2.1% month-over-month.

Core inflation, or the all-items less food and energy index, rose 0.3% in August, following a 0.2% monthly increase in July. On a year-over-year basis, core inflation rose 2.4%, down from a 2.5% jump in July.

Sam Williamson, First American's senior economist, stated that 'inflation regained momentum in August' and that 'persistent services inflation shows that underlying price pressures remain stubborn.' He also noted that the firmer core inflation reading puts another thumb on the scale toward a potential interest rate hike by the Federal Reserve.