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Inflation rose last month as the price of gas, groceries, hotel rooms and airfares rose, along with the cost of clothes and used cars.Consumer prices increased 2.9% in August from a year earlier, the Labor Department said Tuesday, up from 2.7% the previous month and the biggest increase since January. Excluding the volatile food and energy categories, core prices rose 3.1%, the same as in July. Both figures are above the Federal Reserve’s 2% target.The reading is the last the Fed will receive before its key meeting next week, when policymakers are widely expected to cut their short-term rate to about 4.1% from 4.3%. Still, the new inflation data underscores the challenges the Fed is facing as it experiences relentless pressure from President Donald Trump to cut rates. Inflation remains stubborn while the job market is weakening, diverging trends that would require polar reactions from Federal Reserve policymakers to address.Hiring has slowed sharply in recent months and was lower than previously estimated last year. The unemployment rate ticked up in August to a still-low 4.3%. And weekly unemployment claims rose sharply last week, the government also reported Thursday, a sign layoffs may be picking up.Typically the Fed would cut its key rate when unemployment rose to spur more spending and growth. Yet it would do the opposite and raise rates or at least keep them unchanged in the face of rising inflation. Last month, Chair Jerome Powell signaled that Fed officials are increasingly concerned about jobs. Yet stubbornly high inflation could keep the Fed from cutting very quickly.On a monthly basis, overall inflation accelerated, as prices rose 0.4% from July to August, faster than the 0.2% pace the previous month. Core prices rose 0.3% for the second straight month.Gas prices jumped 1.9% just from July to August, the biggest monthly increase since a 4% rise in December. Grocery prices climbed 0.6%, pushed higher by more expensive tomatoes, apples, and beef. The cost of travel soared, with air fares rising 5.9% just from July to August and hotel room prices rising 2.3%. Rental costs also increased, rising 0.4%, faster than the previous month.The impact of tariffs appeared to be mixed, with many imported goods rising in price but modestly. Clothing costs rose 0.5% just last month, though they are still just slightly more expensive than a year ago. Furniture costs rose 0.3% and are 4.7% higher than a year earlier. Appliance costs also rose from July to August, after falling the previous month.The inflation data arrives at the same time that Trump has sought to fire Fed governor Lisa Cook as part of an effort to assert more control over the Fed. Yet late Tuesday, a court said the firing was illegal and ruled that Cook could keep her job while the dispute played out in the courts. Christopher Rugaber, AP Economics Writer
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E-Commerce
Supermarket chain Safeway is reportedly planning close 12 of its stores in the coming weeks. The grocer, which is a subsidiary of Albertsons Companies, currently operates over 900 stores across the United States. But Safeway will shutter the doors at some locations in Colorado, Nebraska, and New Mexico. Ten of the planned store closures are in Colorado. Meanwhile, one store in Nebraska and one store in New Mexico will also close, according to a list compiled by USA Today. Albertsons attributes the closures to store performance. “We continuously evaluate the performance of our stores, and occasionally, after long and careful deliberation, it becomes necessary to make the difficult decision to close certain locations,” Albertsons said in a statement to USA Today. “We are working to place affected associates in nearby stores wherever possible. Fast Company contacted Albertsons to confirm this list. We will update this story if we hear back. Which stores are closing? The following Safeway locations will reportedly close on or before November 7: 201 E. Jefferson, Englewood, Colorado 80113 500 E. 120th Ave, Northglenn, Colorado 80233 1653 S. Colorado Blvd., Denver, Colorado 80222 12200 E. Mississippi, Aurora, Colorado 80012 3657 S. College Ave, Fort Collins, Colorado 80525 860 Cleveland Ave., Loveland, Colorado 80537 5060 North Academy Blvd., Colorado Springs, Colorado 80918 1425 S. Murray Blvd., Colorado Springs, Colorado 80916 315 W. 2nd St., La Junta, Colorado 81050 906 E. Olive St., Lamar, Colorado 81052 230 Morehead Street, Chadron, Nebraska 69337 730 W. Main St., Farmington, New Mexico 87401 Retail store closures are a growing trend Retail closures continue to be a growing trend. Fast Company has been following what many have branded as the retail apocalypse nationwide, which has impacted retailers like At Home, Claires, and Rite Aid. Many familiar retailers have sought Chapter 11 bankruptcy protection as they restructure their businesses and reduce their brick-and-mortar footprints. Some chains, such as fabrics retailer Joann, have winded down operations completely. Safeway isnt the only grocery store reducing its brick-and-mortar footprint. In its first-quarter earnings report in June 2024, Kroger announced plans to shutter 60 of its stores by mid-2026. The news of Kroger and Safeway store closures comes on the heels of a failed merger. In October 2022, Kroger reached an agreement to acquire Albertsons for $25 billiona move that would have created one of the largest grocery chains in the United States. However, in 2024, the Federal Trade Commission (FTC) sued to block the merger, alleging that it would lead to higher prices and eliminate competition. Federal and state judges ruled that the merger was unlawful, and both companies terminated the agreement. Grocery store closings contribute to food deserts Grocery store closures impact local communities. In addition to job losses, closures result in reduced access to food. Supermarket store closures contribute to food deserts, a term used to describe areas with limited access to affordable and nutritious food. According to recent data from the USDAs Food Access Research Atlas, an estimated 18.8 million people in the United States, or 6.1% of the U.S. population, live in areas with limited access to healthy foods. Organizations like Feeding America work to reduce food insecurity.
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E-Commerce
Wall Street pointed toward a third consecutive day of records before the opening bell Thursday ahead of new U.S. data releases on the labor market and inflation.Futures for the S&P 500 rose 0.3% while futures for the Dow Jones Industrial Average and Nasdaq each ticked 0.2% higher.Market movement will hinge on government reports about inflation and unemployment benefits, two areas that the Federal Reserve attempts to manage as part of its dual mandate to control inflation and maintain a healthy labor market.Most economists believe the Fed will cut rates at its meeting next week after recent data revealed a labor market that’s been softening for longer than previously thought. While inflation also remains stubbornly above the U.S. central banks 2% target and is forecast to have risen again in August, Fed officials have increasingly expressed concern about a slowing U.S. job market.Recent government reports have also shown that hiring has slowed sharply in recent months and was lower than previously estimated last year, a sign that companies may be worried about future sales and are less interested in adding staff.Stocks have reached records in large part because Wall Street is expecting the economy to pull off a delicate balancing act: slowing enough to convince the Federal Reserve to cut interest rates, but not so much that it causes a recession, all while inflation remains under control.Many things must go right for that to happen, and an encouraging signal came from a report Wednesday saying inflation at the U.S. wholesale level unexpectedly slowed in August.Traders were already convinced the Fed will deliver its first cut to interest rates of the year at its next meeting, but they need inflation data until then to be mild enough not to derail those expectations.In premarket trading Thursday, shares of residential home flipper Opendoor climbed 36% after the company named Kaz Nejatian, the COO of Shopify, as its CEO. Opendoor also announced that co-founders Keith Rabois and Eric Wu are returning to serve on the board of directors, with Rabois stepping into the chairman’s role.Shares of FedEx fell 1.3% while UPS slipped 2.1% after Bank of America downgraded both package delivery companies’ stock.In Europe at midday, Germany’s DAX rose 0.3%, Britain’s FTSE 100 rose 0.5% and France’s CAC 40 climbed 0.9%.In Tokyo, the Nikkei 225 added 1.2% to 44,372.50, with tech investment company SoftBank Group’s shares jumping 8.3% in a second straight day of gains.Data released Thursday showed Japan’s producer prices rose 2.7% year-on-year in August from a 2.5% rise the previous month, in line with market expectations. The higher cost of food, transport equipment and machinery contributed to the rise in prices.In Chinese markets, Hong Kong’s Hang Seng index slid 0.4% to 26,086.32 while the Shanghai Composite index rose 1.7% to 3,875.31.Shares of chipmaker Semiconductor Manufacturing International Corp added more than 6%, while Hua Hong Semiconductor rose 3.8%. Cambricon Technologies, often called China’s Nvidia, climbed 9%.South Korea’s Kospi climbed 0.9% to 3,344.20 while Australia’s S&P/ASX 200 was down 0.3% to 8,805.00. India’s BSE Sensex added nearly 0.2% while Taiwan’s Taiex rose 0.1%, trimming earlier gains. Teresa Cerojano and Matt Ott, Associated Press
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