Inflation in the United States returned unexpectedly on a month-on-month basis in August. While prices remained stable month-on-month in July, they rose by 0.1 percent in August. Analysts had expected a decline.
Prices rose by 8.3 percent
U.S. consumer prices rose 8.3 percent year-on-year in August, the U.S. Bureau of Labor Statistics said Tuesday. Although the annual inflation rate had fallen by 0.2 percentage point compared with July and by 0.8 percentage point compared with June, analysts viewed the August figures rather negatively. This was due to a month-on-month price increase of 0.1 percent, while a price decline was widely expected.
Prices rose in August compared to July despite a significant decrease in fuel prices, which reached 10.6 percent. Inflation was pushed into positive territory by food prices, which rose by 0.8 % and even by more than 11 % year on year. Food prices have risen at their fastest rate since May 1979.
The Fed may raise interest rates again
According to analysts, the Federal Reserve can be expected to decide on another 0.75 percentage point interest rate hike next week. “Investors are starting to perceive that the monetary restriction to date has not been sufficient,” investment strategist Charlie Ripley told Reuters.
