Inflation in the U.S. during August fell to its lowest level since 2021 as consumer prices continue to moderate in the world’s biggest economy.
The U.S. Bureau of Labor Statistics reported that inflation declined to an annualized rate of 2.5% in August, its lowest level since February 2021 and below economists’ consensus expectation that called for an August inflation rate of 2.6%.
The annual inflation rate in August declined from a reading of 2.9% in July. On a monthly basis, inflation in the U.S. increased 0.2% in August, inline with economists’ forecasts.
Core inflation, which excludes volatile food and energy prices, rose to an annualized rate of 3.2% in August, also inline with forecasts.
The latest inflation data comes a week before the U.S. Federal Reserve is expected to lower interest rates by 25-basis points at its policy meeting on Sept. 18.
The Bureau of Labor Statistics said that food prices in America rose 0.1% in August, while energy costs declined 0.8%.
At the same time, used vehicle prices decreased 1% and medical care services costs fell 0.1% during the month.
The biggest sector exerting upward pressure on inflation continues to be housing-related costs, said the statistics bureau.
The shelter component of the U.S. inflation gauge, which comprises one-third of the index, increased 0.5% on a monthly basis and rose 5.2% on an annual basis in August.
Futures traders are betting 85% that the U.S. central bank will lower interest rates by 25-basis points on Sept. 18.
