MNI BRIEF: US Aug CPI Picks Up; Jobless Claims Also Jump

U.S. CPI inflation picked up in August as Wall Street expected, while initial claims for unemployment benefits jumped to their highest since 2021 for the week ended Saturday, adding to concerns of stagflation. Futures traders are pricing in 28 bps of cuts this month and 76 bps through year end. The FOMC is expected to deliver a quarter-point rate cut next week. 

Headline and core CPI rose 0.382% and 0.346%, respectively, bringing the annual rates to 2.9% and 3.1%. Core goods prices spiked 0.28%, up from 0.21% in July, as businesses passed through tariffs, while core services ex-housing, or supercore CPI, slowed to 0.33% from 0.48% in July. 

Initial jobless claims rose far higher than analysts expected to 263,000 from 236,000 the previous week. Continuing claims, which lag by a week, fell 11,000 to 1.939 million. Weaker labor market data indicate risks to the Fed's dual mandate are shifting into balance, Fed Chair Jerome Powell said last month. (See: MNI INTERVIEW: Fed To Cut Faster After Weaker Jobs - English)