Inflation growth in the US turned out lower than forecast

US inflation in August came in lower than forecast. Following this data, the Fed will have more time before its October meeting to decide whether another interest rate hike is necessary.

The Fed's key inflation gauge, the PCE index, rose 0.3% for the month. Economists had expected a 0.4% increase. Annual inflation came in at 3.4%.

The core measure, which excludes food and energy, rose 0.2% month-over-month and 3% year-over-year. The biggest impact on prices came from a 4.4% rise in gasoline prices. Food prices were unchanged.

Consumer spending rose 0.9% in August, despite prices and interest rates remaining elevated.

The Fed raised interest rates in September for the first time in three years, bringing the range to 3.75%-4%. Following the new data, another increase in October is less likely, though a further rate hike before the end of the year remains possible.

Source: Reuters