The U.S. consumer price index rose to 2.9% on an annual basis in August, data showed on Thursday, with the CPI notching its biggest monthly jump since January. Annual core inflation — more closely watched by Fed officials — rose to 3.1%.
The Federal Reserve’s inflation target is 2%.
Meanwhile, the Labor Department reported a higher-than-expected rise in weekly jobless claims, with unemployment compensation filings hitting their highest level since Oct. 2021.
“The latest set of economic numbers likely creates some additional complications for FOMC policymakers as they contemplate their decision-making ahead of the 16-17 September FOMC meeting,” Ryan Wang, U.S. economist at HSBC, said in a Friday note.
“With some apparent tension between the two sides of the Committee’s dual mandate — inflation and employment — we expect the outcome at the meeting itself will be a 25bp reduction in the federal funds target range to 4.00-4.25%….
