Inflation Rose in August Despite Dip in Gas Prices - Stock Market Drops in Reaction

Inflation Rose in August Despite Dip in Gas Prices - Stock Market Drops in Reaction

Inflation was up in August in the U.S. — despite the relief at the gas pump.

On Tuesday, the U.S. Labor Department reported that the consumer price index increased 0.1% for the month and 8.3% over the past year. 

Excluding volatile food and energy costs, CPI rose 0.6% from July and 6.3% from the same month in 2021.

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“Economists had been expecting headline inflation to fall 0.1% and core to increase 0.3%, according to Dow Jones estimates,” reported  CNBC. “The respective year-over-year forecasts were for 8% and 6% gains.”

“The Federal Reserve has been raising interest rates aggressively — with another super-sized hike on the table next week — to cool inflation. Fed officials have indicated they aren't likely to back off until there's a meaningful, sustained cooling in price gains,” said Axios. 

The market responded accordingly. 

“Consumer discretionary stocks takes a broad beating after consumer inflation data,” reported MarketWatch.

Read more here.