SULAIMANI – (ESTA) Official numbers from last month indicated that US inflation continued to decline, which increased expectations that the US central bank will lower interest rates the following week.
In the year ending in August, consumer prices increased by 2.5% due to decreases in the cost of gasoline, used automobiles and trucks and certain other commodities.
That was lower than 2.9% in July despite an unanticipated increase in housing expenses and it was the slowest pace since February 2021.
The Labor Department data are released during a presidential campaign where one of the main concerns has been the rise in living expenses.
The data, according to analysts, raised the possibility that the Federal Reserve will lower interest rates by 0.25 percentage points at its meeting next week, but it decreased the likelihood of a larger reduction.
“Inflation looks to have been effectively controlled overall, but it hasn’t been entirely defeated because housing inflation isn’t moderating as quickly as anticipated” said Paul Ashworth، chief North American economist at Capital Economics.
According to the data, pricing pressure is lessening for essential home goods.
According to the survey, grocery prices, which were skyrocketing only a few years ago, remained steady from July to August and are up less than 1% from the previous year.
Another essential, gas prices have also decreased, decreasing throughout the course of the month and by more than 10% starting in August 2023. But the cost of other goods kept going up.
With the exception of food and energy, which can be volatile and mask underlying trends, prices increased by 3.2% year over year due to rising airfare, auto insurance, rent and other housing-related expenses.
Chief economist at Fitch Ratings, Brian Coulton, said, “This serves as a bit of a reminder not to get too carried away with a few months of better inflation data.”
“Certainly not enough to stop the Fed cutting rates later this month, but the stickiness of services inflation. will be one reason why the Fed will not be cutting rates at an aggressive pace over the next year or so.”
Two years ago, central banks, including the Federal Reserve, began raising borrowing prices in an effort to reduce inflation.
Global price increases started in 2021 as a result of increased government spending and supply problems brought on by the epidemic.
Following Russia’s invasion of Ukraine in 2022، oil prices skyrocketed, exacerbating the world’s inflation.
US inflation has since dropped toward the 2% rate that is regarded as healthy, having peaked in June 2022 at 9.1%.
(Esta Media Network/BBC)
