Americans will get a clearer picture of where the economy is headed on Thursday, when August data for the Consumer Price Index, which tracks the cost of a broad basket of goods and services, including groceries, rent and medical care, is released.
The report lands just days before the Federal Reserve will announce if it will cut its key interest rate on Sept 17.
Economists surveyed by Bloomberg expect the CPI data to show overall prices up 2.9% from a year ago, an increase from June and July’s 2.7% pace. Together with Wednesday’s producer price index year-over-year reading of 2.6%, the data will likely show that price growth is still running well above the Fed’s 2% target.
While inflation has cooled from its June 2022 year-over-year peak of 9.1%, prices have climbed roughly 9% since July 2022, straining household budgets.
At the same time, job gains have slowed. That underscores the challenge the Fed faces in balancing its dual mandate of stable prices and full employment, says New York Fed President John Williams.
