In short
Rubbish Talk rates CBS MoneyWatch's claim that "CPI rose at 3.4% pace in August, raising odds of Fed rate hike this month" a 2/10 because the 3.4% annual figure, the core CPI reading, and the jump in Fed-hike odds all check out against the BLS data and CME FedWatch, with only a minor verb-choice quibble (the annual pace actually matched July rather than "rising").
The Verdict
Lightly altered. The headline is essentially the base fact: the 3.4% figure, the framing around a looming Fed hike, and the "raising odds" claim all hold up against the Labor Department release and market pricing. The only nitpick is the word "rose," which implies acceleration when the annual rate actually held flat versus July, with the real story of the month being a hotter-than-expected core reading.
What actually happened
The Labor Department reported August CPI up 3.4% year-over-year, matching July's pace. The reading corroborates independent coverage: the consumer price index rose a seasonally adjusted 0.4% for the month, putting the 12-month increase at 3.4%, with both readings in line with the Dow Jones consensus. Core CPI, which strips out food and energy, ran hotter than forecast, and combined with elevated gasoline and diesel costs from the ongoing Iran-related oil shock, pushed traders to sharply raise the odds of a Fed rate hike at the September 16 meeting.
Key facts
- Headline CPI: 3.4% annual, matching July; FactSet had forecast 3.3%, though the CNBC report notes the 3.4% figure was in line with the separate Dow Jones consensus survey, showing forecast panels differed.
- Core CPI: 2.4% annual (down from 2.5% in July), in line with expectations, but up 0.3% month-over-month versus a forecast 0.2%, an acceleration from July's 0.2% pace; core consumer prices rose 0.3% in August, above expectations for 0.2%.
- Gasoline: up 27.4% year-over-year and accounted for more than a third of the monthly CPI increase; diesel hit a record $6.06 a gallon, up over 60% from a year earlier.
- Fed hike odds: jumped to 90% from 70% the prior day per CME FedWatch, broadly consistent with other trackers showing odds in the 85 to 90% range: "traders now price the probability of a quarter-point Fed hike next week at roughly 85%, up from 70% before the report".
What to watch for
Watch whether September's CPI, due next month, captures the more recent spike in oil above $100 a barrel and diesel above $6; economists already flagged that August's survey period predates that move. Also watch the Fed's actual decision on September 16: a hike this "hot but not scorching" data print doesn't guarantee, since some officials had signaled a preference to hold.
