Economists have found a deeply alarming trend in the U.S. economy. In August, inflation roared back even as the labor market began to crack. According to the Bureau of Labor Statistics, consumer prices jumped 0.4% over the course of the month, according to data released Thursday. This increase pushed the annual inflation rate up to 2.9%, the highest that rate has been since January.
The continued increase in the cost of living presents a dual crisis for American households. Economists were expecting a monthly increase of just 0.3%, making that figure all the more alarming. The higher inflation rate reflects not only rising prices but an increasing number of businesses that are passing along elevated costs to consumers. Reasons such as President Donald Trump’s huge tariffs have played a role in these climbing costs, affecting industries from A to Z.
Just as inflation is starting to flare up again, the job market is starting to crack. According to reports, the job market does not have a rosy outlook. This added instability may further complicate financial conditions for the average American. Inflationary pressures combined with a soft labor market are stressing household finances. Consequently, consumers have to do the math and reimagine where and how they can spend their money.
In short, economists have conditioned us to expect businesses to continue to increase prices. They are doing it while absorbing greatly increased operational costs due to tariffs and other bad economic policy. If this pattern continues, we’re sure to see long-term inflationary pressures in our economy, raising prices on everything from food to rent. This growing trend’s larger impact points to a much longer, painful stretch of financial insecurity for consumers.