Sunday, September 24, 2023

Gasoline is fueling inflation in the United States, breaking a series of declines

It is the second month in a row that the world’s leading economy has reported an acceleration in its annual inflation data. It was 3.7% year-on-year in August and 3.2% in July, a month in which it broke a 12-month downward streak. Although the data for the eighth month of the year was five tenths higher than the previous month, the market forecast that it would be around 3.6%, and this did not have a negative impact on Wall Street’s behavior.

A fact that did not surprise investors on Wall Street. The annual inflation rate in the United States was 3.7%, just a tenth higher than expected by economists polled by Reuters. On a monthly basis, consumer prices rose by six tenths compared to July, mainly due to the increase in gasoline prices.

And exactly in a month-on-month comparison, gasoline prices contributed the most to the price increase with an increase of 10.6%; Year-on-year they fell by 3.3%.

Gasoline prices, which have stoked inflation concerns, peaked at $3.984 a gallon in the third week of the month, compared with $3.676 a gallon in the same period in July.

“Today’s report provides further evidence that core inflation is trending down to pre-pandemic levels, at a time when employment remains strong,” US President Joe Biden said, adding: “That’s why I’m focusing “We continue to focus on reducing energy costs and investing in clean energy to strengthen our energy security.”

Core inflation, an indicator the Fed constantly monitors that excludes changing food and energy prices, fell four-tenths to reach 4.3% annually in August. This is the lowest reading since September 2021 and could determine the path for the next central bank decisions.

According to the CME FedWatch tool, interest rate traders now see a 97% chance that the Fed will keep interest rates steady in September and a 61% chance that there will be a pause in November.

Nation World News Desk
Nation World News Desk
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