Record-high U.S. inflation looking a little more transitory as rate cooled in August

The U.S. inflation rate rose at its slowest pace in seven months in August, far less than economists were expecting and a hopeful sign that inflation pressures may be cooling.

The U.S. consumer price index rose at 0.3 per cent in August, down from a 0.5 per cent increase in July and a 0.9 per cent surge in June, the Department of Labour reported Tuesday. It was the smallest increase since the 0.3 per cent rise clocked in January.

The August slowdown in prices was seen as offering some hope that Americans were finally starting to see some relief from a price surge earlier in the year.

Over the past 12 months, consumer prices have gone up by 5.3 per cent in the U.S. That's a slight improvement after two months at 5.4 per cent, which had been the highest annual inflation rate since 2008.

Canada is poised to release its inflation data for August on Wednesday. In July Canada's rate hit a 10-year high of 3.7 per cent and economists expect the August number to tick even higher.

Core prices, which exclude volatile food and energy costs, rose a tiny 0.1 per cent in August and are up by four per cent over the past year.

Republicans have attacked the Biden administration for this year's surge in prices, but administration officials have insisted that the price jump will be temporary and prices will begin to return to more normal levels as numerous supply chain problems are resolved.