Ignore the glowing signs at U.S. gas stations, and the country's inflation fight is going well. The core consumer price index, which strips out more volatile food and energy costs, eased to a 4.3% annualized increase in August, the Bureau of Labor Statistics said on Wednesday, even as the headline rate inched up. The bad news about costlier refueling is also the good news.
The 11% surge at the pump lifted inflation for a second consecutive month. Beyond that, however, the numbers are encouraging. Prices for TVs and used cars fell. Grocery bills grew at a slower pace. Transportation costs jumped 2%, but that was likely linked to the price of energy.
All told, the figures are likely to keep the Federal Reserve from raising interest rates next week. If anything, it gives Chair Jerome Powell a reason to be more confident. He said in July that tumbling gas prices weren’t enough to declare victory over inflation, and that the core gauge was still worryingly high. The opposite formulation should hold true, too, and even offers a more encouraging signal.(By Ben Winck)
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