U.S. Consumer Prices Show Marginal Growth in August

U.S. consumer prices rose slightly by 0.2% in August, maintaining the same growth rate as in July. Year-on-year, the CPI increased by 2.5%, the slowest rise since February 2021. Core inflation showed some persistence, complicating the Federal Reserve's decision on an anticipated interest rate cut next week.

In August, U.S. consumer prices saw a marginal increase of 0.2%, mirroring the growth rate from July. This data, released by the Bureau of Labor Statistics, reveals a 2.5% rise in the Consumer Price Index (CPI) over the past 12 months, marking the smallest annual increase since February 2021.

While inflation remains above the Federal Reserve's 2% target, it has notably slowed down. This deceleration allows policymakers to shift their attention more towards the labor market. Recent government data displayed underwhelming nonfarm payroll growth in August and a slight drop in the unemployment rate from 4.3% in July to 4.2%.

Forecasts by economists and financial markets indicate mixed expectations regarding the Fed's upcoming policy meeting. The probability of a 50 basis points rate cut stands at roughly 29%, while the likelihood of a quarter-point cut is around 71%. Amid these developments, the Fed has maintained its interest rate within the 5.25%-5.50% range since last year.

(With inputs from agencies.)