Follow live coverage and analysis of the latest economic numbers.
Last Updated:
Sep. 10, 2024 at 9:48 PM EDT
Ahead of the Release
The U.S. Bureau of Labor Statistics is slated to release the August reading of the consumer price index Wednesday morning.
The data will be one of the final major economic releases ahead of next week’s Federal Open Market Committee meeting. While officials are expected to lower interest rates, the CPI numbers could help determine the size of the cut.
Here is what economists expect:
YoY: 2.6% increase expected vs. 2.9% increase in July
MoM: 0.2% increase expected, matching last month’s increase
Core YoY: 3.2% increase, matching last month’s increase
Core MoM: 0.2% increase, matching last month’s increase
GO DEEPER: What to Expect in the August CPI Report
Key Events
10 hours ago
Inflation Projected to Cool. What the CPI Could Mean for Rate Cuts.
Latest Updates
10 hours ago
Inflation Projected to Cool. What the CPI Could Mean for Rate Cuts.
The consumer price index reading for August will be one of the last major economic releases ahead of the Federal Reserve’s Sept. 17-18 policy meeting. If the inflation reading is benign, as expected, it is unlikely to change the Fed’s rate-cutting plans.
The Bureau of Labor Statistics is set to release the CPI measure at 8:30 a.m. ET on Wednesday.
Economists surveyed by FactSet expect that the price of consumer goods and services rose by 2.6% in August on a year-over-year basis. That would compare with a 2.9% increase in July, and mark the lowest CPI print since early 2021.
Headline inflation is expected to have risen by just 0.2% from July to August, largely reflecting lower gasoline and diesel prices. “Global demand for petroleum products has been soft in 2024 amid tepid growth in Europe and China, and U.S. energy production is at a record high,” writes Bill Adams, chief economist for Comerica Bank.
Food costs might have been more of a mixed bag last month. Tracking online inflation data, Adobe Analytics found that grocery prices fell 3.7% in August from July 2024. Yet recent producer-price-index data showed price increases for commodities such as meat, eggs, and dairy. That might put pressure on the CPI’s overall food index in August.
Core inflation—which excludes food and energy prices and is a measure favored by both economists and the Fed—is likely to have grown by 3.2% year over year, steady with July’s annual increase. Economists expect core CPI rose 0.2% on a month-to-month basis.
The Cleveland Fed’s Inflation Nowcasting model, however, forecasts that monthly core inflation hit 0.26% in August, slightly above consensus expectations.
While Wednesday’s CPI report is a critical one for Fed officials as they weigh how much to lower interest rates at the conclusion of their September meeting, inflation data lately have taken a back seat to labor market conditions in terms of policy relevance, writes Citi’s Veronica Clark. August payroll growth was lower than expected.
Following Friday’s jobs report, New York Fed President John Williams said rates should be lowered “over time,” adding that he believed policy was well positioned.
Based on futures-market pricing, the Fed is widely expected to lower rates by a quarter of a percentage point next week. It likely would take “a big shock” in the inflation data to push the Fed to cut rates by half a percentage point, writes BeiChen Lin, investment strategist at Russell Investments.
If core CPI rose just 0.1% or less from July to August, that could raise expectations for a 50-basis-point cut, Clark said.
Weekly initial claims for unemployment insurance will be reported on Sept. 12, and the August retail sales report will be released in mid-September. Both will offer the Fed additional guidance on the appropriate size of the first rate cut.