US consumer inflation continued to rise in August at the headline level in year-over-year terms, rising to 2.9% — the highest since January. “Consumer inflation came in mildly hotter than forecast, but not nearly high enough to prevent the Fed from starting to cut rates next week,” said Kathy Bostjancic, chief economist for Nationwide. “The labor market is losing steam and reinforces that the Fed needs to start cutting rates next week and that it will be the start of a series of rate reductions.”

US jobless claims rose last week to the highest level in nearly four years, raising a new warning flag for the labor market and providing another data point that suggests the Federal Reserve will cut interest rates next week. “The latest jobless claims data, along with other recent labor market indicators, show signs of a more vulnerable job market and will lead the Federal Reserve to lower interest rates at its meeting next week,” Nancy Vanden Houten, lead U.S. economist with Oxford Economics, said Thursday in a report.

Tariffs generated about $29.5 billion in customs duties for the US government in August. The sum marks the first full month of receipts since new “reciprocal” tariffs went into effect on Aug.7.

The US economy is showing signs of strain from weak growth in payrolls and uncertainty on the effects of tariffs, the International Monetary Fund (IMF) said on Thursday. “What we’ve seen over the past few years is that the US economy has proven to be quite resilient. We do see now that some strains are beginning to show,” IMF spokesperson Julie Kozack said.

US 10-year Treasury yield fell to 4.03% on Thursday, the lowest since April, as investors continue to expect that the Federal Reserve will cut interest rates next week. Fed funds futures are estimating a 94% probability that the central bank will easy policy at its Sep. 17 FOMC meeting.

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