US Inflation Rises Less Than Expected, Reducing Odds of Another Rate Hike

The US inflation rate rose less than expected in August, which could lead to a reduced likelihood of another interest rate increase from the Federal Reserve next month.

According to data released by the Commerce Department's Bureau of Economic Analysis (BEA), the Personal Consumption Expenditures Price Index (PCE) increased 0.3% last month after a downwardly revised 0.1% gain in July.

Economists had forecasted the PCE price index rising 0.4% after a previously reported 0.2% gain in July, so this result is somewhat lower than anticipated.

In the 12 months through August, PCE inflation advanced 2.6% after increasing by a downwardly revised 3.4% in July.

Excluding food and energy components, core PCE inflation was 0.2% over the month and 3.0% year-on-year in August.