Updated

U.S. consumer prices rose 3.4% year-over-year in August while wages grew just 3.1%, marking a real-terms squeeze on household purchasing power. Despite the hotter-than-wage inflation print, equity markets rallied, helped in part by falling oil prices that offset inflation concerns. Wall Street is now flagging that the inflation problem extends well beyond energy and the Iran conflict: prices for a broad range of food and crop-related products are climbing simultaneously, with rising food-table costs compounding the pressure on consumers already coping with wages that are failing to keep pace with overall price increases.