Overview

• Official data show consumer prices rose 2.9 percent in August from a year earlier, the fastest annual pace since January.
• The labor market continues to cool with unemployment at 4.3 percent, weekly jobless claims up to 263,000, and prior payrolls revised down by 258,000.
• Economists warn the combination of hotter inflation and weaker hiring raises the risk of a return of stagflation, though likely in a milder form than the 1970s.
• Markets anticipate the Fed could cut rates next week even as inflation runs above its 2 percent goal, highlighting a difficult policy trade‑off.
• Analysts cite President Trump’s tariffs and tighter immigration rules as contributing to higher prices and reduced labor supply, with Fed Chair Jerome Powell noting tariff pass‑through effects on some goods.