- by foxnews
- 28 Nov 2024
Prices in the US remained stubbornly high in August even as the overall pace of inflation slowed for the second consecutive month. The news sent US stock markets into a tailspin, with the Dow Jones index losing nearly 1,300 points.
But despite the declining headline rate, the details of the report showed prices rising across a wide range of goods and services and triggered a sharp selloff on Wall Street, the worst since June 2020.
The Dow closed nearly 4% lower, at 31104.97, the S&P fell 4.3% and the tech-heavy Nasdaq dropped over 5% as investors sold companies across the board from airlines and construction to retail and technology.
But the prices of other goods and services are still rising. Prices overall rose slightly over the month, 0.1% higher than July. And after stripping out energy and food costs prices rose 6.3% over the last 12 months, up from 6.1% in July. The increases were broad-based with prices for shelter, food and medical care rising fastest.
The food index increased 11.4% over the last year, the largest 12-month increase since the period ending May 1979.
While the headline rate of inflation has slowed, it still leaves inflation at a rate unseen in four decades and adds to the headwinds facing the Biden administration as midterm elections approach.
The news comes as the Federal Reserve weighs another sharp increase in interest rates as it struggles to bring price rises under control. Investors sold off stocks, bonds, oil and gold as the news broke and the likelihood of another big rate hike increased.
The Fed is raising rates at a pace unseen since the 1980s. It raised its benchmark interest rate by 75 basis points in July, the second such rise in two months, and is expected to announce a similarly sharp rise in rates when it meets again next week.
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