Inflation Accelerates to 3.4%, Gas Prices Spike Amid Renewed Mideast Tensions
The latest inflation report from the Labor Department shows that US inflation accelerated in August, rising 3.4% compared to the same month last year. This is a concern for Federal Reserve officials, who have been trying to bring down inflation rates. The increase in inflation comes as gas prices spiked in the wake of renewed fighting in the Middle East.
Gasoline prices are not the only thing rising - prices for appliances, car repairs, and wireless phone services also jumped last month. Economists worry that more expensive fuel can spill into other parts of the economy, leading to higher costs for consumers. The average cost of a gallon of gas is now 7% higher than it was in August.
The Federal Reserve is under pressure to boost its benchmark interest rate next week, which could lead to higher mortgage and auto loan costs in the months ahead. However, some Fed officials have signaled that they may not take action if inflation remains steady or declines slightly.