Credit Union National Association (CUNA) Senior Economist Dawit Kebede, PhD, issued the following statement in response to the Labor Department’s August Consumer Price Index:
“The good news is that the August inflation report was on target with what was expected. The slight monthly price increase of 0.3% is close to the pre-pandemic average but the annual rate remains high compared to last year.
“On the other hand, there are indications that the strong economic growth we saw in the second quarter is slowing down. We know this because of the decline in the consumer sentiment index amid concerns of the Delta variant and a slower job market.
“The Federal Reserve will probably delay slowing its purchase of Treasury and mortgage-backed securities despite slight indications that the price increase in durable goods is transitory, as illustrated by the reduction in used car prices. This is because we are far from maximum employment.”