U.S. Consumer Prices Rise 3.4% in August

The U.S. Department of Commerce reported Wednesday that consumer prices rose 3.4% in August compared to the previous year. This figure fell below the 3.7% projection from economists, though monthly prices increased 0.3%, keeping inflation above the 2% target set by the Federal Reserve System.

American consumer spending grew 0.9% from July, showing resilience despite inflation-adjusted after-tax incomes remaining unchanged. This spending surge occurred as consumer confidence plummeted to its lowest level since 2014, according to data from The Conference Board Europe.

Market investors responded positively to the lower-than-expected inflation data, speculating that the Federal Reserve System might delay a planned interest-rate hike. This speculation follows a rate increase implemented by the central bank two weeks prior, marking the first such hike in three years.