Inflation in the U.S. Falls to 2.5% in August 

Inflation in the U.S. rose slightly in August, but core inflation showed some stability, which might discourage the Federal Reserve from cutting interest rates by half a percentage point next week.

The Labor Department’s Bureau of Labor Statistics reported on Wednesday that the consumer price index (CPI) rose by 0.2% last month, following a similar rise of 0.2% in July. In the 12 months through August, the CPI rose by 2.5%, the smallest annual increase since February 2021, following a 2.9% rise in July.

Economists polled by Reuters had expected the CPI to rise by 0.2% and 2.6% year-on-year. Although inflation remains above the Federal Reserve’s 2% target, it has slowed significantly, allowing policymakers to focus more on the labor market in their efforts to support economic expansion.