Inflation heated up as expected in August to the highest rate since January

"That's up from 2.7% in June and July and marks the highest rate since January. There has been some evidence of tariffs' impacts on inflation in the past few months, as companies begin passing costs to their consumers, but it could take time to see more effects. The US Court of Appeals for the Federal Circuit recently ruled that most of President Donald Trump's tariffs were illegal, adding to an atmosphere of economic uncertainty."

"While recent inflation rates have ticked up from the recent low of 2.3% in April, Federal Reserve Chair Jerome Powell said in August that "upside risks to inflation had diminished." A weaker labor market could lead the Fed to begin loosening monetary policy in the near future. "The unemployment rate had increased by almost a full percentage point, a development that historically has not occurred outside of recessions," Powell said."

Year-over-year inflation rose to 2.9% in August, up from 2.7% in June and July and the highest level since January. Some recent price pressure may reflect tariffs as companies start passing higher costs to consumers, though full effects could take time. A court ruling found most of the tariffs illegal but they remain in place until at least mid-October. Inflation expectations have inched up. The labor market has softened, with unemployment rising nearly a percentage point and recent job reports showing weaker-than-expected employment, which could prompt the Federal Reserve to adjust monetary policy.

Read at Business Insider