Category: Local news

(WASHINGTON) — Inflation held steady in August but price increases remained elevated as the Iran war continued to push up fuel prices months after it began. The reading matched economists’ expectations.

Prices rose 3.4% in August compared to a year earlier, maintaining the same level from the prior month, federal government data released on Friday morning showed.

Inflation stands more than a percentage point higher than the Federal Reserve’s target rate of 2%.

Gas prices jumped nearly 4% in August from July, accounting for about a third of the overall price jump last month, the U.S. Bureau of Labor Statistics said. Shelter prices — which include home-owner payments and rental charges — also sped up in August from July.

Groceries provided a bright spot in the report, however. The price of groceries stayed flat in August from July, putting annual inflation for groceries at 2.2%. That figure for grocery inflation stands well below the annual pace of overall price increases.

The fresh data arrived days after oil prices topped $100 a barrel and gas prices notched their highest level for any Labor Day on record.

The economy has shown signs of additional strain in recent days, including a bond selloff that threatens to raise borrowing costs for mortgages and credit cards.

Central bankers are sure to closely examine the inflation report as they weigh a potential interest rate hike at their meeting next week. Federal Reserve Chair Kevin Warsh has vowed to cool off persistently elevated price increases.

Despite a stubborn bout of inflation, the economy remains fairly robust by some measures.

A blockbuster jobs report last week showed employers added 162,000 workers in August, demonstrating continued resilience for the nation’s labor market. The economy grew over three months ending in June, defying fear of a downturn triggered by the Iran war.

Inflation, however, continues to weigh on shoppers, while raising the likelihood of Fed intervention that may slow the economy.

Attacks on oil tankers in the Middle East pushed global crude prices above $105 a barrel as of Thursday, which amounted to a rise of about 50% since the Iran war broke out in late February.

The average price of a gallon of gas in the U.S. stands at $4.29, putting it more than $1.30 higher than before the war, AAA data showed.

Record-high diesel prices have raised transport costs for many everyday products, including groceries, clothes and furniture.

The price woes have divided central bankers eager to contain inflation but reluctant to cool off the labor market.

The Fed opted to hold interest rates steady at its most recent meeting in July. Three of the 12 members on the Fed’s policymaking board, however, voted in favor of a rate hike, marking the largest number of dissenters casting ballots in the same direction since 2016.

Financial markets peg the odds of a quarter-point rate hike next week at 71%, according to the CME Group’s FedWatch tool, a measure of investor sentiment.

Warsh, who took the helm of the central bank in May, said late last month that it should prioritize fighting inflation.

“Inflation is running above our 2% target so the Fed’s predominant focus right now should be on prices,” Warsh said in remarks last week at the Fed’s annual summer gathering in Jackson Hole, Wyoming.

“If the Fed gets inflation wrong and judges the economy wrong, who gets the worst of it? Not the financial high-fliers. Hard-working Americans are the ones left to deal with inflation that is too high or jobs that suddenly appear less secure,” Warsh added.

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(LONDON) — The global price of oil topped $100 a barrel on Wednesday for the first time since July, as continued tensions between Iran and the United States added to uncertainty over future supply.

The rise followed a statement on Tuesday by U.S. Central Command, which said that its forces destroyed five Islamic Revolutionary Guard Corps oil tankers.

The IRGC followed those strikes by issuing a warning that all oil tankers in Kuwaiti and Bahrani waters should be evacuated.

Brent crude oil prices, a benchmark for global trading, climbed about 2.7%, trading at about $100.57 a barrel for contracts with November deliveries.

U.S. oil traded at about $95 a barrel, up by about 2%.

A large-scale U.S.-Israeli attack on Iran in late February prompted Iran’s near-closure of the Strait of Hormuz, which facilitates one-fifth of global crude supply.

The ensuing war set off the largest oil supply disruption on record and prompted the release of hundreds of millions of barrels of reserve crude from emergency storage in dozens of countries. A six-month stretch of on-again, off-again fighting has continued to choke off oil supply and keep prices elevated.

Oil prices account for a large share of the price of gasoline. The average price of a gallon of gas in the U.S. currently registers at $4.22, according to AAA, marking a 41% jump since the war broke out.

Diesel prices in the U.S. hit a new record high on Wednesday, jumping to an average of $5.94 a gallon, AAA data showed. High diesel prices push up transport costs for many everyday products, including groceries, clothes and furniture.

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