steep tariffs <\/a>imposed by President Donald Trump \u2014 are rising faster than they have in months, according to Commerce Department data released Friday.\n <\/p>\n\n The Personal Consumption Expenditures price index \u2014 the inflation gauge the Federal Reserve uses for its 2% target rate \u2014 rose 0.3% on a monthly basis (versus a 0.2% increase in July), which lifted the annual rate to 2.7% from 2.6%, and hitting a six-month high.\n <\/p>\n
\n Energy and gas prices rose in August, and that was a big driver of the monthly increase; however, food prices shot higher as well. Those were up 0.5%, the highest monthly gain since March, and are now up 2.2% from last year.\n <\/p>\n
\n When excluding food and energy, categories that can be quite volatile, a closely watched gauge of underlying inflation held steady in August. The core PCE price index rose 0.2% in August, the same pace as July, and was unchanged at 2.9%.\n <\/p>\n
\n Friday\u2019s data showed that inflation remains well above the Fed\u2019s 2% target.\n <\/p>\n
\n \u201cInflation dynamics inside the August PCE report illustrated stubborn service sector inflation that increased from 3.5% to 3.6%, while one can clearly observe rising good prices inside the index with a year ago increase of 13.9% in beef and veal costs along with a 7% increase in household utility costs as well as a 6.2% increase in the cost of electricity all on a year ago basis,\u201d Joe Brusuelas, chief economist at RSM US, wrote in a note Friday.\n <\/p>\n
\n Economists were expecting inflation to rise 0.3% from July and to increase to 2.7% annually.\n <\/p>\n
\n Stocks moved higher on the news. The Dow rose by 200 points, or 0.44%. The S&P 500 gained 0.2% and the Nasdaq Composite rose 0.03%.\n <\/p>\n
\n For the August spending spree, Americans appeared to dip into their savings. Friday\u2019s report showed that the saving rate dropped to 4.6% from 4.8% in July.\n <\/p>\n
\n Part of that was because spending gains outpaced income growth for the month. Personal income was up 0.4% and just 0.1%, when accounting for inflation.\n <\/p>\n
\n Still, although the spending trajectory appears strong on the aggregate, the US economy is being increasingly powered by the few: Through the second quarter of this year, the top 20% of earners accounted for roughly half of all spending, Moody\u2019s Analytics data has shown.\n <\/p>\n
\n This \u201cK-shaped\u201d environment<\/a>, economists warn, makes the US economy increasingly vulnerable to shocks.\n <\/p>\n\n \u201cWhile we are encouraged by the 0.4% increase in income growth, the fact that Americans had to draw down savings to support the current pace of spending is a not-so-friendly remainder that the pace of spending is likely driven by upper-end households while lower-income cohorts remain stressed,\u201d Brusuelas wrote.\n <\/p>\n
\n This story is developing and will be updated.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Americans ramped up their spending in August; however, their costs of living were on the rise as food…\n","protected":false},"author":2,"featured_media":170762,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-170761","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/170761","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=170761"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/170761\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/170762"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=170761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=170761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=170761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}