Inflation eased slightly in August, but it was much less than expected.
The consumer price index rose by 8.3% compared to the same month last year. This is slightly below the 8.5% rate in July.
But monthly inflation still rose 0.1%, according to the Bureau of Labor Statistics, after flat in July. This added to fears that the Fed had not yet got prices under control and pushed ahead with its rate hike plan to try to slow the economy.
With a 10.6% decline in the gasoline index, there was a sharper rise in prices for food, housing and medical care.
Economist Paul Krugman, a columnist for The New York Times, tweeted: “So this core reading might be talking about the past, not the future. Given this reading, the Fed will have no choice as to whether to continue raising, but that shouldn’t greatly affect your views on how long and how far to go higher.”