The Labor Department reported Wednesday that its consumer inflation measure declined in August to the lowest level since February 2021.
The consumer price index (CPI), a broad measure of goods and services costs across the U.S. economy, increased 0.2% for the month, the Bureau of Labor Statistics reported. The increase met analysts’ expectations.
The year-over-year CPI in August was 2.5%, down from 2.9% in July and just below analysts’ estimates.
The core CPI, which strips out food and energy prices from the index, increased 0.3% for the month and is 3.2% year-over-year.
Although the outcomes mostly matched analysts’ expectations, market watchers said they hoped for a larger decline to enable the Federal Reserve to more heavily cut interest rates at its meeting Sept. 17-18.
“This is not the CPI report the market wanted to see,” said Seema Shah, chief global strategist at Principal Asset Management. “With core inflation coming in higher than expected, the Fed’s path to a 50-basis-point cut has become more complicated.”
The Labor Department will release August data on wholesale inflation Thursday morning.
