U.S. Consumer Prices and Jobless Claims Surge in August, Driven by Grocery and Fuel Costs

In August, U.S. consumer prices increased by an annual rate of 2.9%, with grocery and fuel prices rising significantly. Food at home prices increased by 0.6%, the largest monthly increase in nearly three years, and gas prices rose by 1.9%. The rise in prices is attributed to factors such as President Trump's policies, including tariffs and immigration reform. An expert from the Center for Economic and Policy Research noted that a 2% increase in fresh fruits and vegetables in one month is significant, linked to mass deportations and tariffs leading to a shortage of workers needed to harvest crops. Real hourly earnings saw their lowest increase in over a year, with inflation-adjusted wages growing by only 0.7% in August, indicating a decline in purchasing power. Despite these challenges, the stock market saw gains, with the Dow rising 528 points (1.16%) to surpass 46,000 points, the S&P 500 gaining 0.7%, and the Nasdaq Composite rising 0.6%. The Federal Reserve is expected to cut its benchmark interest rate by a quarter point at its upcoming policy meeting, with an 89% probability, and an 11% chance of a larger half-point cut.