Economists are expecting consumer prices to rise to a 2.9 percent annual increase in the monthly consumer price index (CPI) reading Thursday, up from 2.7 in July.

Despite the rise, markets are also expecting a quarter-point interest rate cut from the Federal Reserve next week, as concerns about a softening labor market take precedence over price pressures driven by tariffs.

“Sensitivity to [the] labor market slowing reinforces that the plan is to look through tariff inflation,” economists with LH Meyer/Monetary Policy Analytics wrote Wednesday.

President Trump’s tariffs have been weighing on business and consumer sentiment for months, and started to show up in price data over the summer.

The overall effective U.S. tariff rate is now between 9 percent and 19 percent — by some measures the highest level in a close to a century, though estimates have varied as Trump has adjusted import tax levels. ​​Penn Wharton put the average effective tariff rate at 9.14 percent in June; the Yale Budget Lab put it at 18.6 percent last month; and Fitch ratings put it at 16 percent this week.

While tariffs are adding to price pressures, they could also be contributing to a slowdown in hiring and consumer spending, creating a stagflationary mix economists have been warning about since the beginning of the year.

“Greater clarity about US tariff hikes does not alter the fact that they are huge and will reduce global growth. And evidence of a slowdown in the US is now appearing in the hard data; it’s no........

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