Stockton, California – The latest update on US consumer inflation for August may not have a significant impact on the Federal Reserve’s decision to cut interest rates next week, but experts anticipate a pause in the recent disinflation trend. CapitalSpectator.com’s ensemble model projects a 3.1% increase in core CPI for August, unchanged from the previous month.

If this estimate holds true, it would be the first time since March that core CPI has not decreased on a year-over-year basis. Economists, based on Consensus forecasts, also expect a stable 3.2% growth in core CPI compared to the previous year.

While an unchanged core CPI reading could indicate a possible shift in the disinflation trend, most analysts believe that disinflation will continue. This expectation is influenced by predictions of softer economic growth, which were reinforced by a weaker rebound in August’s hiring data.

“The US economy is not heading into a recession in 2024,” stated Jack Kleinhenz, chief economist at the National Retail Federation. He highlighted the possibility of a soft landing with a simultaneous decline in growth and inflation.

With expectations of subdued inflation pressures, some economists argue that the Fed should prioritize caution and proceed with rate cuts. The central concern remains that while near-term inflation is expected to ease, a core inflation rate above 3% still exceeds the Fed’s 2% target.

Federal Reserve Chairman Powell emphasized the need for policy adjustments at the central bank’s annual economic conference in Jackson Hole, Wyoming. This shift towards prioritizing softer economic activity over taming inflation reflects recent data trends.