US inflation cools in August while consumer spending jumps

U.S. inflation rose less than expected in August, potentially reducing the odds of another Federal Reserve interest rate hike next month. The Personal Consumption Expenditures Price Index increased 0.3% in August, below the 0.4% forecast, following a downwardly revised 0.1% gain in July. Year-on-year, PCE inflation held at 3.4% in August, with core inflation, excluding food and energy, at 3.0%. The Bureau of Economic Analysis revised its methodology for certain prices, affecting data back to 2021. Consumer spending surged 0.9% in August, despite high borrowing costs and low consumer confidence. The Fed recently raised its benchmark rate to 3.75%-4.00%, the first hike in three years. New York Fed President John Williams said there was "no urgency" for further action, and market odds of an October hike fell to 51.5% from 70% on Monday.