The headline inflation rate in the United States ticked up in August to 3.7% compared to a 3.2% reading in July. The increase is linked to higher gasoline prices.

Core inflation, which excludes the volatile food and energy categories, cooled somewhat, going from 4.7% in July to 4.3% in August.

Overall price growth is well below the recent peak of 9.1% seen in May 2022, but remains above the 2% target* the US Federal Reserve shares with the Bank of Canada.

Given these numbers, the Fed is unlikely to reduce interest rates anytime soon, but the slowdown in core inflation along with other signs of weakening economic conditions may be enough for it to stay on the sidelines and refrain from announcing another interest rate increase at its meetings next week.

In July, the Fed raised interest rates for the 11th time since March 2022 to a range of 5.25%-5.5%.

Like the Bank of Canada, the Fed has indicated that further rate increases are not off the table if the economic data indicate that inflation is not trending toward the 2% target.

*The Federal Open Market Committee judges that inflation of 2% over the longer run, as measured by the annual change in the price index for personal consumption expenditures, is most consistent with the Federal Reserve’s mandate for maximum employment and price stability.

Answer to the previous trivia question: Edmonton is home to the tallest building in western Canada with residential units—the 66-story Stantec Tower.

Today’s trivia question: When was the last time the US inflation rate was above 10%?