August CPI report shows 0.2% inflation rise, Fed still expected to cut interest rates

Published: Sep 10, 2024 Duration: 00:04:40 Category: News & Politics

Tags : CBS News U.S. CPI federal reserve inflation interest rates MoneyWatch consumer price index

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>>> CONSUMER PRICES ROSE LAST MONTH WHILE THE ANNUAL INFLATION RATE HIT ITS LOWEST LEVEL SINCE 2021. IT ROSE .2% SINCE AUGUST AND JULY. THE INFLATION RATE SITS AT 2.5% OUR CBS NEWS CONTRIBUTOR IS JOINING ME NOW TO TELL US WHAT THIS MEANS. >> THERE IS GOOD, BAD AND UGLY. THE GOOD IS THAT THE HEADLINE CAME DOWN 2.5% OVER THE YEAR AND THE HIGH WAS AT 9.5%. WE ARE A LONG WAY FROM WHERE WE WERE. CORE INFLATION IS SURPRISINGLY ELEVATED. I WAS SURPRISED TO SEE IT STUCK AT 3.2%. SO THAT IS NOT SO GREAT. BUT SERVICES IS STILL VERY HOT. ALMOST 5% YEAR OVER YEAR. IT ROSE .10% MONTH OVER MONTH. HOUSING IS STILL VERY HOT AND TRANSPORTATION SERVICES, ALMOST 8% YEAR OVER YEAR. SO THESE ARE SOME PRETTY HOT SECTORS. BUT THERE IS GOOD, ENERGY PRICES ARE ALMOST ACROSS THE BOARD LOWER, DOUBLE DIGITS DOWN, YEAR OVER YEAR. EVEN GAS IN THE SUMMER SEASON. GLOBAL RENT PRICES ARE FALLING. AND THAT IS ALSO GOOD NEWS. >> WE KNOW THAT THE FED WILL BE MEETING NEXT WEEK AND THAT GENERAL CONSENSUS IS IT WILL BE LOWERED BUT JUST HOW MUCH AND HOW DO THEY FEEL ABOUT HOW THINGS ARE GOING. ANY OF THESE NUMBERS HAVE AN IMPACT ON WHETHER WE WILL SEE A QUARTER OF A POINT OR HAVE A POINT? >> STATUS QUO IS THAT WE WILL BASICALLY GET A CUT NEXT WEEK. THE KEY IS IN THE LANGUAGE THAT WE ALL TEND TO PAY ATTENTION TO. IS THIS THE START OF AN EASING CAMPAIGN, WILL THEY GIVE US 25 BASIS POINTS, OR MAYBE THEY SHOULD GO 50. THE PICTURE IS DARKENING AND THERE IS A LOT OF CONCERNS ABOUT THE STATE OF THE LABOR MARKET AND THE NUMBER OF LAYOFFS THAT HAVE BEEN RISING. THE UNEMPLOYMENT RATE STARTING TO TAKE UP. WE ARE NOT NEARLY AT ANY LEVEL CONSIDERED RECESSIONARY BUT WE ARE SEEING A NOTICEABLE AMOUNT OF SOFTNESS IN THE LABOR MARKET. SO THEY MIGHT WANT TO THINK ABOUT GOING A LITTLE HARDER, BUT ALL OF THAT SAID, THE LANGUAGE THAT THEY USED TO PREP THE MARKET OR INVESTORS FOR, THIS IS THE DOWN PAYMENT THAT WE BELIEVE WILL SUSTAIN RATE CUTS, AND THAT IS GOOD NEWS FOR CONSUMERS. >> THE THING ABOUT ALL THESE NUMBERS IS WE ARE SORT OF BACKWARD FACING. DURING THE PRESIDENTIAL DEBATE FORMER PRESIDENT TRUMP FALSELY CLAIMED THAT THE NATIONS INFLATION IS THE HIGHEST IT HAS EVER BEEN AND THAT PRICES ARE 50% TO 80% HIGHER THAN A FEW YEARS AGO. HOWEVER, THE CUMULATIVE INCREASE IS JUST OVER 19%. WE ARE TO CONSUMERS STILL SEE PRICES GOING UP? >> WE ARE STILL SEEING PRICES GO UP AND FOOD, IT HAS COME DOWN SUBSTANTIALLY BUT IT HAS BEEN ACTUATING. BUT THE SHELTER COST, THE STORY OF THE LACK OF AFFORDABLE HOUSING IS A REAL PROBLEM. PEOPLE WHO WANT TO RENT ARE GETTING STICKER SHOCK ALL THE TIME. MORTGAGE COSTS ARE HIGH. THE AVAILABLE STOCK OF HOUSING PRICES, HIGH. SO THAT CONTRIBUTES TO THE SENSE THAT PEOPLE FEEL SQUEEZED. AND IF YOU ARE LEANING ON THE USE OF CREDIT CARDS AND YOU ARE PAYING A LOT IN YOUR APR. ERE IS ONE BRIGHT SPOT, CAR PRICES, NEW VEHICLES AND OLD HAVE GONE DOWN. SO IT IS A GREAT TIME TO BUY USED CARS. >> THEY WENT THROUGH THE ROOF DURING THE PANDEMIC, SO ARE THEY SETTLING INTO WHERE THEY SHOULD BE? >> THAT IS A GREAT WAY TO PUT IT.

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