Overview

• Consumer prices rose 0.4% in August and 2.9% year over year, while core CPI increased 0.3% on the month and 3.1% annually, with shelter the biggest contributor.
• Producer prices cooled, with headline PPI down 0.1% in August and the annual rate easing to 2.6%, signaling softer wholesale pressures.
• Initial jobless claims climbed to 263,000, the highest since October 2021, following BLS revisions that showed 911,000 fewer jobs in the year through March than previously reported.
• Traders assign roughly 88%–92% odds to a 25-basis-point cut next week and only modest odds to a larger move, as stocks hold gains and Treasury yields hover near 4%.
• Economists say a rate cut next week is likely, though stickier categories like shelter and tariff-related costs could constrain the pace of further easing this year.