Inflation Eases Less Than Expected in August

The latest inflation numbers are in, and while they’re heading in the right direction, the Federal Reserve isn’t popping champagne just yet. As inflation rose a modest 0.1% in August, bringing year-over-year growth to 2.2%—cooler than expected.

Core PCE, which strips out the more erratic food and energy prices, also saw a 0.1% bump for the month and a 2.7% rise over the past year. This marks little change from July but indicates inflation is inching closer to the Fed’s 2% target.

While these numbers are encouraging, they won’t ease the Fed’s vigilance. With core inflation still stubbornly elevated, policymakers won’t likely declare victory just yet. The road to price stability may be narrowing, but it’s far from over. Expect the Fed to keep a watchful eye on the economic horizon.

For everyday Americans, the continued slowdown in inflation could mean a gradual easing of the price pressures that have squeezed household budgets over the past two years. However, with core inflation still elevated, essential goods like housing and healthcare may remain expensive for some time, leaving consumers to navigate high costs even as overall inflation cools.