US Inflation Accelerates as Gas Prices Surge
US inflation accelerated in August due to rising gas prices, which have jumped by nearly 4% from July. The consumer price index rose 3.4% last month compared with a year ago, just like July, but quickened month-to-month as costs increased 0.4%. This is the third consecutive month that core prices rose, with August's increase of 0.3% being the largest since April.
The Federal Reserve is now under pressure to raise interest rates next week, which could lead to higher mortgage and auto loan costs in the months ahead. Chair Kevin Warsh has signaled a need for continued disinflation before leaving rates unchanged, but Friday's report may sway his decision.
Gas prices are not the only concern, as prices for appliances, car repairs, and wireless phone services also jumped last month. Diesel prices have hit record highs above $6 per gallon, pushing up shipping costs for groceries and other goods.