Fed expected to raise rates next week
Consumer prices in the United States rose 3.4% in the year to August, unchanged from the previous month, according to figures released by the Bureau of Labor Statistics. The overall inflation rate was driven higher by gasoline costs.
The fuel pressure has shown up most acutely at the diesel pump. A gallon of diesel hit a new all-time high of more than $6 on average on Friday, according to BBC News. The diesel record comes alongside continued pressure on gasoline prices, which the BLS identified as a contributor to the August reading.
The spike in fuel prices has tracked higher global oil prices, with the increase attributed to supply disruptions caused by the US-Iran war. The conflict has reportedly constrained crude flows and pushed up benchmarks worldwide.
The August inflation report lands ahead of the Federal Reserve’s latest interest rate decision, scheduled for next week. Growing expectations point to another rate increase, as the central bank seeks to slow the rate at which prices are rising.
US household budgets have come under mounting pressure, especially at the fuel pumps, with the diesel record adding to the strain.