Inflation continued to decrease in August, with consumer price growth falling to 2.5%, the lowest level since 2021. Food prices also slowed, with gasoline prices declining more than 10% compared to the previous year. Despite inflation now being close to the Federal Reserve’s 2% target, many consumers still feel the impact of past rapid price increases. Core inflation, excluding food and energy prices, unexpectedly increased 0.3% due to rising housing costs. During a recent presidential debate, the topic of inflation was raised, with both candidates discussing their economic policies.
Since the start of the Covid-19 pandemic, the cost of groceries and dining out has increased significantly. Housing costs continue to rise, with rent up 25% nationwide on average. Evictions are also on the rise in certain areas. The latest inflation report is expected to prompt a 0.25% cut in the Federal Reserve’s key interest rate. While some economists remain optimistic about the economy, others are concerned about weak job data leading to a potential “hard landing.” The pace and extent of interest rate cuts will be closely watched to determine the Fed’s stance on the economy. Overall, the current economic situation remains uncertain, with varying predictions about future growth and stability.
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