US inflation drops to 8.3% in August

US inflation dropped to 8.3% in August from 8.5% in July, with the figure coming in ahead of analyst expectations of 8.1%.

The result marked the lowest reading in four months, with a US energy index rise of 23.8% compared to 32.9% in July, due to a major slowdown in gasoline costs to 25.6% from 44% and fuel oil inflation of 68.8% against 75.6% month-on-month.

Consumer prices rose 0.1% across August, exceeding analyst expectations of a 0.1% decrease.

Natural gas expenses grew to 33% from 30.5% and electricity prices accelerated 15.8%, representing the fastest rate since August 1981.

Food inflation hit 11.4%, with shelter rising 6.2% from 5.7% and used cars and trucks inflation increasing 7.8% from 6.6%.

US markets fell on the gloomy report, with inflation remaining far higher than investors had hoped for to dissuade US Federal Reserve chair Jerome Powell from his hawkish rate hikes stance.

The Dow Jones fell 2.7% to 31,503.6, the S&P 500 dropped 3% to 3,983.3 and the NASDAQ plummeted 3.8% to 11,793.

However, the dollar consequently gained against the Euro and the pound after the inflation report, with the Sterling falling from $1.17330 to $1.15593 and the Euro sliding from $1.01765 to $1.00326.

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