Inflation reports this week expected to show prices still on the rise
Cattle meat was prepared for a customer in a grocery store in Miami, Florida on 22 July 2025.
Joe Raedle | Getty Images
This week’s key inflation reports are expected to show that prices are accelerated in August, although the Federal Reserve is not in a way that prevents the comparison interest rate at a meeting next week.
The Work Statistics Office is planned to release the producer price index in August on Wednesday and then publish a consumer price index that is closely monitored the next day.
According to Dow Jones, economists expect to increase by 0.3% monthly on the board, including critical basic readings that excludes reports, title all-priests indices and variable food and energy prices.
In this case, it will push the annual headline CPI ratio to 2.9%, the highest level since January and more than 2% of the Fed’s target and 0.2 percent from July. On his face, this seems to be a deterrent for the Fed to facilitate the monetary policy when he meets next week.
However, the two factors will be activated: First, it is estimated that core reading did not change at 3.1%. Secondly, the increase in inflation is expected to come from tariff -sensitive goods rather than service prices that affect a much larger part of the US economy of $ 30 trillion.
If these trends are evident in the report, the Central Bank is expected to look at the increase and turn their attention into a weaker labor market that can use a support from lower rates. For the time being, the officials are often monitoring tariffs as one -time price increases, which are not likely to cause longer -lasting inflation.
“In total, the Fed is still warmer than the Fed wants to see,” ING’s international economist James Knightley said. He said. “They will look at a wider picture. The US is a main service sector economy.”
Of course, President Donald Trump’s tariffs are likely to be more likely to appear in the form of price increases for products such as automobiles, furniture and clothes, as well as other products.
However, Goldman Sachs economists in a note, “Tariff effects, as well as the underlying tendency inflation to fall further, we expect to decrease, reflects the contribution of contraction from housing rental and labor markets.” He said.
However, this is a double -edged sword for the economy, as consumers feel the tuft from falling housing values and fast -free wages.
“This combination, concerns about prices, concerns about revenues, concerns about the reserve, these three things that come together are very toxic for the growth story.” He said. “This begins to make the Fed more careful about where we go.”
Producer prices to report in front of the CPI are considered as an indicator of pipeline pressures. Although it increased by 0.9% in July, the increase is expected to be tempted in August.
