Experts say inflation came down from its 13-year high last month. However, prices are still high compared to before the pandemic. Year-on-year the Consumer Price Index was up 5.3% compared to the forecasted 5.4%. The news sent gold and silver prices higher Tuesday morning. In other news, House Democrats outlined tax increases they aim to use to offset up to $3.5 trillion in spending on the social safety net and climate policy. The proposal includes top corporate and individual tax rates of 26.5% and 39.6%.
CNN Business/Anneken Tappe
US inflation eased in August. But America’s not out of the woods yet
Inflation took a breather in August, coming down from a 13-year high. Still, price increases remain uncomfortably high compared to before the pandemic.
Consumer prices rose 5.3% in the year ended in August, slightly less than the 5.4% increase in June and July, the Bureau of Labor Statistics said Tuesday. Stripping out more volatile items like food and energy, prices rose by 4%, also a smaller increase than in July.
For the month of August alone, consumer prices rose 0.3% adjusted for seasonal swings. It was the second straight month in which the inflation rate fell slightly. Without food and energy, prices rose 0.1% for the month, the smallest increase since February.
Prices for airline tickets and car insurance declined in August. And used car prices in August declined for the first time since February.
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Kitco News/Jim Myckoff
Gold sees price gains following tame U.S. inflation data
Gold and silver prices are higher and trading near their daily highs in early U.S. trading Tuesday, following a U.S. inflation report that came in cooler than expected and in turn sparked a sell off in the U.S. dollar index. Gold prices had slipped to a three-week low overnight. October gold futures were last up $4.40 at $1,796.70. December Comex silver was last up $0.044 at $23.845 an ounce.
The U.S. consumer price index report for August came in a up 0.3% from July versus the forecast up 0.4% and after a rise of 0.5% in July. Year-on-year the CPI was up 5.3% compared to forecasts of up 5.4%. The report falls into the camp of the U.S. monetary policy doves who want the Federal Reserve to hold off on tightening monetary policy, and that’s what put some downside price pressure on the U.S. dollar index.
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House Democrats propose new tax hikes to pay for their $3.5 trillion bill: Here are the details
House Democrats on Monday outlined a bevy of tax hikes on corporations and wealthy people to fund an investment in the social safety net and climate policy that could reach $3.5 trillion.
The plan calls for top corporate and individual tax rates of 26.5% and 39.6%, respectively, according to a summary released by the tax-writing Ways and Means Committee. The proposal includes a 3% surcharge on individual income above $5 million and a capital gains tax of 25%.
It’s unclear how much the tax increases would raise and if the new revenue would offset the full investment in social programs. Democrats could ultimately cut the legislation’s price tag as centrists balk at a $3.5 trillion total.
The tax proposals may change before Democrats craft the final bill they hope to pass in coming weeks. The Ways and Means Committee will debate tax policy when it resumes its markup of the mammoth spending package this week.
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