US Inflation Slows Slightly to 3.4% Amid Increased Spending
US inflation slowed to 3.4% in August from a year ago, meeting lower-than-expected expectations of 3.7%. This is still above the Federal Reserve's target rate of 2%, but it marks a slight cooldown from July's 3.7%. On a monthly basis, prices increased by 0.3%, up from 0.1% in July.
The core inflation rate, which excludes volatile energy and food categories, also came in lower than expected at 3% year-over-year. This rate rose just 0.2% month-over-month, a sign that prices are still running hot but not as quickly as some economists feared.
Despite the slight slowdown in inflation, Americans accelerated their spending last month, with consumer expenditure jumping 0.9% from July to August. This increase was likely fueled by wealthier individuals cashing in on higher stock prices and others taking on more debt to support their spending.