US inflation rises to 2.9% in August

{"text":[[{"start":null,"text":"

"}],[{"start":11.55,"text":"US inflation rose to 2.9 per cent in August, underlining the Federal Reserve’s challenge of balancing persistently elevated price growth with a weakening jobs market ahead of a high-stakes decision on interest rates next week."}],[{"start":28.14,"text":"Thursday’s annual consumer price index figure from the Bureau of Labor Statistics was above July’s 2.7 per cent and in line with the 2.9 per cent forecast by analysts in a Bloomberg poll."}],[{"start":43.32,"text":"Core inflation held steady at 3.1 per cent, matching expectations and showing that the effects of President Donald Trump’s tariffs on underlying price growth remain measured."}],[{"start":56.36,"text":"A separate report from the labour department on Thursday showed that 263,000 people made first-time claims for jobless benefits last week, up from 236,000 on the week before and well above Wall Street estimates of 235,000. It marked the highest total for initial claims since October 2021."}],[{"start":83.24,"text":"The data comes as the Fed is grappling with a weakening labour market and political pressure from Trump to cut rates."}],[{"start":null,"text":""}],[{"start":91.99,"text":"“If you take the stronger evidence we’re now seeing of a weakening in the labour market with the modest inflationary effect that tariffs are now having, it feels like a September cut is pretty much locked in,” said Daniel Hornung, a fellow at the Stanford Institute for Economic Policy Research and a former economic adviser to ex-president Joe Biden."}],[{"start":114.92999999999999,"text":"Traders continued to expect a quarter-point rate cut from the central bank next week, but bet on a slightly faster pace of cuts at subsequent meetings."}],[{"start":126.36999999999999,"text":"The two-year Treasury yield, which is sensitive to interest rate expectations, initially fell as much as 0.07 percentage points to 3.49 per cent, but later eased its decline to 0.03 percentage points."}],[{"start":145.51999999999998,"text":"The world’s biggest economy added just 22,000 positions in August, according to official figures published last week that raised fears the jobs market was stalling. The BLS also this week revised down the number of jobs the US added in the year to March 2025 by 911,000, suggesting the labour market had started to cool in 2024."}],[{"start":175.84999999999997,"text":"Joe Lavorgna, economic counsellor to US Treasury secretary Scott Bessent, said that the latest data supports the Trump administration’s calls for large reductions in borrowing costs."}],[{"start":189.27999999999997,"text":"“It’s clear that the labour market is not anywhere near as strong as people thought it was when President Trump took office in January,” Lavorgna said. “As the secretary has said . . . we could use a much bigger recalibration of interest rates.”"}],[{"start":206.56999999999996,"text":"Fed chair Jay Powell had already opened the door to a September rate cut, saying late last month that a softening jobs market would temper the risk of higher inflation from Trump’s sweeping tariffs."}],[{"start":null,"text":""}],[{"start":222.31999999999996,"text":"Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management, said that, while inflation was likely to rise further in the coming months, the Fed was “likely to draw comfort from anchored inflation expectations and the absence of overheating in the labour market, which reduce the risks of second-round effects”."}],[{"start":246.60999999999996,"text":"After lowering borrowing costs by a percentage point last year, the Fed has since left interest rates in a 4.25 to 4.5 per cent range as it assesses the inflationary impact of the US trade war."}],[{"start":270.59,"text":""}]],"url":"https://audio.ftmailbox.cn/album/a_1757636966_6704.mp3"}