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\n Grocery prices jumped 0.6% in August, fueling a sharper-than-expected jump in inflation last month.<\/p>\n
Frederic J. Brown\/AFP<\/p>\n
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Frederic J. Brown\/AFP<\/p>\n
Inflation inched higher last month as Americans closed out the summer paying more for both groceries and gasoline. <\/p>\n
Consumer prices in August were up 2.9% from a year ago, according to a report Thursday<\/a> from the Labor Department. That’s a sharper annual increase than the previous month, when inflation was clocked at 2.7%. <\/p>\n Prices rose 0.4% between July and August, compared to a 0.2% increase the previous month. Prices for groceries jumped 0.6% while gasoline prices rose 1.9%. <\/p>\n Consumers also saw higher prices for new and used cars, clothing and airfares in August. Stripping out volatile food and energy prices, “core” inflation was 3.1% for the last 12 months. <\/p>\n The Federal Reserve faces a challenge <\/p>\n The continued rise in prices poses a challenge for the Federal Reserve as it weighs what to do about interest rates. Policymakers are widely expected to lower their benchmark rate by a quarter percentage point next week to prop up the sagging job market<\/a>. But Fed officials may be wary about additional rate cuts in the face of stubborn inflation.<\/p>\n The August cost of living figures cover a month when President Trump raised tariffs on goods from many U.S. trading partners. The tariffs may have contributed to higher prices for imported goods such as coffee (up 3.6% last month), bananas (up 2.1%) and apparel (up 0.5%). <\/p>\n