CPI 0.4% MoM, Exp. 0.3%

The Consumer Price Index rose 2.9% in August from a year earlier, in line with forecasts, as President Trump’s tariffs continued to filter through the economy.

Inflation Data

Economists had expected the CPI to rise 2.9%, according to FactSet. The index, which tracks the price of goods and services commonly bought by households, showed that inflation has remained at or below 3% this year, with July’s reading at 2.7%. While inflation has eased significantly since its 2022 peak, many everyday costs remain high.

Despite the slowdown, price growth has been creeping upward in recent months, moving further from the Federal Reserve’s 2% target. A CBS News poll found that two-thirds of Americans feel prices have risen in recent weeks, underscoring persistent consumer frustration.

Tariff Pressures and Fed Outlook

Economists point to Trump’s tariffs as a key driver of higher prices, since businesses pay import duties and often pass those costs to consumers. The Fed has so far refrained from cutting rates, wary that doing so might reignite inflation. Still, with the labor market weakening, Fed Chair Jerome Powell has suggested a cut could come at the Sept. 17 meeting.

Analysts say that despite the hotter CPI report, the Fed is still likely to move ahead with a cut given the deterioration in jobs data. “While the CPI report is a tad hotter than expected, it will not give the Fed a moment of hesitation,” said Seema Shah, Chief Global Strategist at Principal Asset Management.

Rising Household Costs

Imported products are among the items seeing the sharpest increases: coffee prices jumped 21.7% year over year, while furniture climbed 4.7%. Day-to-day costs also rose, with food prices up 3.2%, driven largely by restaurants.