The consumer price index increased 0.1% from July, after no change in the prior month, Labor Department data showed Tuesday. From a year earlier, prices climbed 8.3%, a slight deceleration, largely due to recent declines in gasoline prices.
The acceleration in inflation points to a stubbornly high cost of living for Americans, despite some relief at the gas pump. Price pressures are still historically elevated and widespread, pointing to a long road ahead toward the Fed’s inflation target. Treasury yields surged, the S&P 500 index opened lower and the dollar rose. Traders boosted bets that the Fed will raise interest rates by three-quarters of a percentage point, now seeing such an outcome as locked in.“If there was any doubt at all about 75 -- they’re definitely going 75” at next week’s Federal Open Market Committee meeting, Jay Bryson, chief economist at Wells Fargo & Co., said on Bloomberg Television. “We thought they’d be stepping it back to 50 in November.
Shelter costs -- which are the biggest services’ component and make up about a third of the overall CPI index -- continue to rise. Overall shelter costs increased 0.7% from July and 6.2% from a year ago, both the most since the early 1990s.Persistently high inflation has dragged down President Joe Biden’s approval ratings and threatened Democrats’ chances of retaining their thin congressional majorities in November’s midterm elections.
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