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Rising inflation and a deteriorating job market puts the Fed and Americans in a difficult spot

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WASHINGTON (AP) — Inflation rose last month as the price of gas, groceries and airfares jumped while new data showed applications for unemployment aid soared, putting the Federal Reserve in an increasingly tough spot as it prepares to cut rates at its meeting next week despite persistent price pressures.

Consumer prices increased 2.9% in August from a year earlier, the Labor Department said Thursday, up from 2.7% the previous month and the biggest jump since January. Excluding the volatile food and energy categories, core prices rose 3.1%, the same as in July. Both figures are above the Federal Reserve’s 2% target.

A separate government report Thursday showed that weekly applications for unemployment aid jumped 27,000 to 263,000, the highest in nearly four years. Requests for jobless benefits are a proxy for layoffs. Recent reports have also showed that hiring has weakened dramatically this year and was lower than previously estimated last year.

The data raises the specter of “stagflation,” a trend that last bedeviled the U.S. economy in the 1970s. The term refers to a period of slower growth, higher unemployment along with rising inflation. It is unusual because a weak economy typically keeps inflation in check.

Such a scenario could create major headaches for the Fed as it prepares for a meeting next week, when policymakers are widely expected to cut their short-term rate to about 4.1% from 4.3%. The Fed is under relentless pressure from President Donald Trump to cut rates. At the same time, stubborn inflation while the job market is weakening is difficult for the central bank because they are diverging trends that require polar reactions from Fed policymakers to address.

Typically the Fed would cut its key rate when unemployment rises to spur more spending and growth. Yet it would do the opposite and raise rates — or at least keep them unchanged — in the face of rising inflation.

Last month, Chair Jerome Powell signaled that Fed officials are increasingly concerned about weaker hiring, setting the stage for a rate cut next week. Wall Street investors think there is an 85% chance the Fed will cut twice more after that, according to futures pricing tracked by CME Fedwatch.

“Consumer inflation came in mildly hotter than forecast, but not nearly high enough to prevent the Fed from starting to cut rates next week,” Kathy Bostjancic, chief economist for Nationwide, said. “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.”

Where inflation heads next is a key question for the Fed. While Thursday’s report showed inflation picked up, data released Wednesday suggested prices at the wholesale level are cooling. Economists also noted that a separate measure of inflation that the Fed prefers, which will be released in about two weeks, should come in lower than Thursday’s figures and paint a more benign picture of prices.

On a monthly basis, overall inflation accelerated, rising 0.4% from July to August, faster than the 0.2% pace the previous month. Core prices rose 0.3% for the second straight month.

Many economists and some key members of the Fed think that the current pickup in inflation reflects one-time increases from Trump’s sweeping tariffs and won’t lead to a lasting inflationary trend. They argue that a weaker job market will hold down wages and force companies to keep prices in check.

Subadra Rajappa, head of U.S. rates strategy at Societe Generale, said that while inflation was elevated last month, there were also signs that the cost of services moderated, suggesting that outside of tariffs, prices are cooling.

Yet Joe Brusuelas, chief economist at RSM, a tax and consulting firm, says that higher-income households are still spending sufficiently to push some prices higher, such as hotel and airfare costs, which leapt last month. Such spending could keep inflation stubbornly high even in a weak job market, he said.

“The Fed’s getting ready to cut into a sustained increase in prices,” he said. “Very unusual spot. … we can see tariff induced inflation in a slow, steady and methodical manner.”

Goods prices picked up last month, a sign Trump’s sweeping tariffs are pushing up costs. Gas prices jumped 1.9% just from July to August, the biggest monthly increase since a 4% rise in December. Grocery prices climbed 0.6%, pushed higher by more expensive tomatoes, apples, and beef. Rental costs also increased, rising 0.4%, faster than the previous month.

Clothing costs rose 0.5% just last month, though they are still just slightly more expensive than a year ago. Furniture costs rose 0.3% and are 4.7% higher than a year earlier.

Some restaurant owners have boosted prices to offset the rising costs of food. Cheetie Kumar, who owns Mediterranean eatery Ajja in Raleigh, North Carolina, said she’s facing higher costs on everything ranging from spices she imports from India, coffee and chocolate she gets from Brazil, and soy she gets from Canada.

“Those are things that I cannot source locally, we do source a lot of produce and meat and everything else from local farmers, but I don’t know any nutmeg growers in North Carolina,” she said.

Her overall costs are up about 10% from a year ago, with beef costs up 7%, and much bigger increases for things like coffee, chocolate (300%) and spices (100%).

She’s raised prices on some of her menu items by $1 or $2, but said she’s at the limit of how much she can do so before demand wanes and she stops earning a profit.

Bigger companies are also feeling the pinch.

E.L.F. Cosmetics said this spring that it was raising prices by $1. Last month, however, CFO Mandy Fields said it is no longer certain whether the $1 price increases will be enough to offset rising tariff costs.

Shoppers have yet to feel the big sting that economists had predicted earlier in the year. Many retailers ordered goods ahead of tariffs and have also absorbed a big chunk of the costs rather than passing them along to consumers, who’ve grown increasingly leery of price increases.

But Walmart and other big chains have warned of costs increases as they replenish their inventories, with the full impact of tariffs in effect.

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AP Business Writer Anne D’Innocenzio contributed from New York. AP Business Writer Mae Anderson contributed from Nashville.





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Canelo vs Crawford: UFC chief Dana White clashes with reporter at news conference

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Crawford, with 41 wins and 31 knockouts, won his first world title in 2014 at lightweight against Scotsman Ricky Burns. He went on to unify the light-welterweight and welterweight divisions before moving up again.

Saturday’s bout will be broadcast globally on Netflix, reaching a potential audience of more than 300 million subscribers.

It is the first major boxing event promoted by White alongside Saudi’s Turki Alalshikh, signalling a new, if uncertain, era for the sport.

As organisers hyped up the new partnership as the saviour of the sport and suggested boxing has been suffering for years, one of its biggest stars – and highest earners with a reported $150m purse to collect on Saturday – Alvarez, chimed in.

“Hey, boxing was always bigger, bigger and big. Don’t say boxing is not big enough. You know how big is boxing,” he said.

Alvarez pushed Crawford as tempers flared at in New York in June, but the two shared a nod and handshake to end on a respectful note.



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Packers vs. Commanders takeaways: Jordan Love, Micah Parsons, Tucker Kraft shine in Green Bay’s statement win

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If the Packers used a Week 1 domination of the Lions as a major statement, they backed it up and then some in Week 2. The Packers (2-0) defeated the Commanders (1-1), 27-18, fueled by an explosive, efficient offense and a tremendous defense that seemed to move at a completely different speed than Washington’s offense.

Love finished with 292 yards passing and a pair of touchdowns, with six completions for 124 yards and a score going to Kraft. Micah Parsons officially recorded a half-sack, but his impact was much larger than that, and Green Bay sacked Jayden Daniels four times while smothering would-be pass catchers.

After a slow start — Jayden Reed’s shoulder injury being the main development — Green Bay’s offense got rolling on its second drive, fueled by a 57-yard completion from Love to Kraft after Kraft broke free down the middle. Love connected with Romeo Doubs for a 5-yard touchdown shortly thereafter.

Washington did not manage a single first down in the first quarter — a first since Daniels’ arrival — and Green Bay embarked on another long drive early in the second quarter, highlighted by a remarkable, twisting 37-yard catch from Malik Heath.

Josh Jacobs powered in from two yards out to make it 13-0. Commanders defensive lineman Deatrich Wise Jr. got carted off after trying to block the extra point (which was successful), adding to Washington’s woes. He was later ruled out with a quad injury.

Washington finally got on the board with a 51-yard Matt Gay field goal, but Gay missed a 58-yarder that could have cut the deficit further just before the half. But Green Bay’s Brandon McManus then doinked a 48-yard try as time expired.

Down 17-3 after a McManus field goal, Washington finally found the end zone via a 20-yard Zach Ertz catch-and-run. Green Bay answered, though, with another touchdown drive, this one capped by Love’s 8-yard touchdown toss to Kraft.

McManus nailed a 56-yard field goal shortly thereafter to extend the lead to three scores. Daniels found Deebo Samuel Sr. for a touchdown late, but it proved to be only window dressing — and a costly one at that: Austin Ekeler suffered a non-contact Achilles injury and was carted off the field.

Washington will hope to use the mini-bye to recuperate before hosting the Raiders in Week 3. Green Bay will hope to carry momentum over to a Week 3 visit to the Browns.

Takeaways

Parsons leads overwhelming pass rush

The Commanders know Parsons very well from his time in Dallas, and he just keeps dominating them: He now has 11 sacks in nine career games against Washington.

Parsons’ impact can’t be limited to sacks, though. He drew a penalty and caused a ton of havoc in the backfield throughout the night, even as he remains on a snap count. Washington tried chipping him and double-teaming him, and that only produced middling results. It also produced openings for other pass rushers: Rashan Gary and Devonte Wyatt both had a sack, and Edgerrin Cooper, Karl Brooks and Barryn Sorrell each had a half-sack.

It also wasn’t just the plays the pass rush made. It was the plays it didn’t allow Daniels to make. He ran for just 17 yards, and Washington had just 51 as a team.

The ability to get pressure with just four pass rushers also allowed Green Bay to play aggressively in coverage. Daniels’ 4.8 yards per pass attempt were his lowest in a full game in his career.

Love, Kraft spearhead big-play offense

Love had eight completions of at least 15 yards, spread out to five different receivers. Three went to Kraft, a testament to the tight end’s all-around abilities. He led all tight ends in average yards after catch last year, and he showed off his ability to get downfield, too. He broke several tackles Thursday night, leading to key extra yardage that either moved the sticks or made it a more manageable down and distance.

Love, meanwhile, found plenty of open targets downfield, and even when they weren’t open, receivers often made plays — Heath’s catch is worth watching again and again.

Love also didn’t throw an interception for a ninth straight start, which ties Aaron Rodgers for the second-longest streak by a Packers quarterback since at least 1950. When Love doesn’t put the ball in harm’s way, that usually leads to success: Green Bay is 13-4 in his starts when he doesn’t throw an interception.

Commanders offense struggles to find any success

The 18 points Washington scored isn’t by any means an impressive total, but it’s also perhaps even generous given the myriad issues. Josh Conerly Jr. had a rough night going up against Parsons. It’s been a rude introduction to the NFL for Conerly, the first-round pick our of Oregon, who switched from left tackle to right tackle and has promptly had to face Brian Burns, Abdul Carter and Parsons in his first five days of regular-season football.

Conerly’s struggles aside, Washington’s passing attack was anemic; Daniels went 1 for 7 on throws at least 15 yards downfield, with his receivers often blanketed, and Washington’s quick-hitting plays were completely smothered much of the night. Without the threat of the run game, Washington failed to find anything sort of rhythm, and their 230 total yards also marked the fewest since Daniels’ arrival.





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Charlie Kirk shooting: new video of suspect released by FBI amid urgent appeal for help from the public | Charlie Kirk shooting

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US officials have issued an urgent appeal for help from the public as they continue to search for the shooter of conservative activist Charlie Kirk, releasing new videos and photos from the scene of the attack in Utah.

More than 24 hours after Kirk was shot while speaking in front of thousands of people at a Utah university, the state’s governor, appearing alongside FBI director Kash Patel and other officials, said “we need as much help as we can possibly get.”

“We cannot do our job without the public’s help,” Utah’s governor, Spencer Cox said, adding that the FBI had received more than 7,000 leads and tips so far.

The newly released video showed a person wearing a hat, sunglasses and a long sleeve black shirt running across a roof, climbing off the edge of the building and dropping to the ground. The suspect is believed to have fled into the local neighbourhood after firing the one shot and has not yet been identified.

Investigators said they had obtained clues, including a palm print, a shoe impression and a high-powered hunting rifle found in a wooded area along the path the shooter fled. But they were yet to name a suspect or cite a motive in the killing.

This combination of image released by the FBI shows photos of a person of interest in the investigation into the fatal shooting of Charlie Kirk. Photograph: FBI/AFP/Getty Images

The direct appeals for public support at the night-time news conference, appeared to signal law enforcement’s continued struggles to identify the shooter and pinpoint the person’s whereabouts. Authorities didn’t take questions, and Patel did not speak at the news conference. The FBI is offering up to $100,000 for information leading to the identification and arrest of the person.

The death of Kirk – a close ally of President Donald Trump – has drawn renewed attention to the escalating threat of political violence in the United States which, in the last several years, has cut across the ideological spectrum. The assassination drew bipartisan condemnation from political leaders.

In appealing for information, Cox said on Thursday, “there is a tremendous amount of disinformation” online.

“Our adversaries want violence,” Cox said. “We have bots from Russia, China, all over the world that are trying to instil disinformation and encourage violence. I would encourage you to ignore those, to turn off those streams.”

Cox also pledged to find the killer and pursue the death penalty.

Kirk’s casket arrived in his home state of Arizona aboard Air Force Two, accompanied by vice-president JD Vance. Vance’s wife, Usha, stepped off the plane with Kirk’s widow, Erika.

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Vance helped carry Kirk’s casket with a group of uniformed service members as it was loaded on to the plane. Kirk’s conservative youth organisation, Turning Point USA, was based in Phoenix.

“So much of the success we’ve had in this administration traces directly to Charlie’s ability to organize and convene,” Vance wrote on social media, referencing Kirk’s role in getting Donald Trump elected last year. “He didn’t just help us win in 2024, he helped us staff the entire government.”

Kirk was a provocateur and a divisive figure who is credited with helping bring young people, especially men, into the US president’s Make America Great Again (Maga) movement.

In a statement on Thursday, TPUSA wrote: “All of us have lost a leader, a mentor, and a friend. Above all, our hearts are with Erika and their two children. Charlie was the ideal husband and the perfect father. Above all else, we ask you to pray for the Kirks after the incomprehensible loss they have suffered.”

Kirk’s killing drew bipartisan condemnation of the rise in political violence in the US.

Trump, who said he would award the Medal of Freedom posthumously to Kirk, spoke to Kirk’s wife on Thursday.

He said that authorities were making “big progress” towards tracking down the suspect and that in regards to a motive, he has an “indication … but we’ll let you know about that later”.

Just hours after Kirk had been declared dead after being rushed to a nearby hospital on Wednesday, Trump delivered a video message from the Oval Office, vowing to track down the suspect.

A photo of Charlie Kirk, the CEO and co-founder of Turning Point USA who was shot and killed, stands at his vigil. Photograph: Lindsey Wasson/AP

“My administration will find each and every one of those who contributed to this atrocity and to other political violence, including the organizations that fund it and support it,” Trump said.

One day after his inflammatory address, blaming “the radical left” for Kirk’s death, Trump appeared to strike a more conciliatory tone, agreeing with a suggestion from a reporter that his supporters should not respond with violence.

The White House quickly posted the exchange on social media, perhaps hoping to tamp down anger that has already spilled into violence, with the beating of a critic of Kirk in Boise, Idaho, during a vigil on Wednesday night.

Don Bacon, a Republican from Nebraska who is retiring after this term, told NBC News that he wished Trump would unite the country after the shooting, “but he’s a populist, and populists dwell on anger”.

“I have to remind people, we had Democrats killed in Minnesota too, right?” Bacon added, in reference to the murder of Minnesota’s former house speaker Melissa Hortman and her husband, Mark, in June by a gunman with a hitlist of 45 people, all Democrats.

With Reuters and the Associated Press



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