Inflation eased in August for the second-straight month but remained too high, opening the doors for a new rate hike next week.
According to data from the Bureau of Labor Statistics released Tuesday the Consumer Price Index, that measures most consumer goods and services, was up 8.3% year on year, a slowdown from the 8.5% gain in July and the 9.1% spike in June.
Costs were driven by increases in food, shelter and medical care services, offsetting a sharp decline in gasoline prices.
The CPI gained 0.1% last month after being unchanged in July. A 10.5% decline in gasoline prices was offset by increases in rents, food and healthcare.
Excluding food and energy costs, CPI rose 0.6% from July and 6.3% from the same month in 2021. Energy prices fell 5% for the month, led by a 10.6% slide in the gasoline index.
Inflation is still too far from the Federal Reserve’s target of 2%. The Central bank is expected to decide on another big rate hike of 75 basis points ahead of its policymaking meeting next week.
Dow dropped more than 700 points on inflation data, denting hopes that central bankers may ease their course of interest-rate increases.