US Inflation Accelerates Amid Middle East Conflict
US inflation continued its steady climb in August as gas prices surged due to renewed fighting in the Middle East. The consumer price index rose 3.4% last month compared with a year ago, matching July's figure, but increased more sharply on a monthly basis, jumping 0.4%. This increase is attributed in part to higher energy costs, with the nationwide average cost of a gallon of gas now at $4.30, over 7% higher than a month ago.
The Labor Department reported that core prices, which exclude volatile food and energy categories, were 2.4% higher in August compared to last year's figures, down slightly from July's 2.5%. However, on a monthly basis, core prices rose 0.3%, the largest increase since April.
This development is expected to embolden Federal Reserve officials who advocate for a rate hike at their upcoming meeting. With about 70% likelihood of a rate increase seen by investors, according to CME Fedwatch, the central bank may choose to lift its benchmark interest rate in an effort to combat inflation.