U.S. Inflation Continued to Rise in August, Even as Energy Prices Declined – Investopedia
The Labor Department’s latest update on the Consumer Price Index (CPI) on Tuesday showed consumer inflation rose in August, as prices for most goods continued to climb. Headline inflation rose 0.1% in August, following an unchanged reading in July as costs for food, shelter, and medical expenses rose, while energy costs declined. Prices were up 8.3% from a year ago, decelerating from an 8.5% rate in July, but still near multi-decade highs and above economists’ expectations of 8.1%.
Core inflation, which excludes more volatile food and energy costs, rose 0.6% in August, up from July’s 0.3% gain. On an annual basis, the rate of core inflation accelerated to 6.3%, up from 5.9%.
Energy prices continued to decline, falling 5% in August. Gasoline prices fell 10.6%, driven lower by falling prices for crude oil and other energy commodities. Gas prices have fallen steeply from their peak levels in mid-June, with the national average price for a gallon of unleaded gasoline declining to $3.70, down from a peak of $5.02 on June 14, as reported by AAA.
However, costs continued to increase for other products, particularly food. Costs for food continued to accelerate, rising at an 11.4% annual rate—up from 10.9% in July and marking the highest rate of food inflation since 1979. Inflation for “food at home,” a category that includes groceries and other consumer staples, rose 13.5% year-over-year. By contrast, food away from home, which tracks prices at restaurants and other dining establishments, rose at an 8% annual rate.
The report showing prices continue to rise will likely strengthen the Federal Reserve’s case for continued interest rate hikes. The Federal Open Market Committee (FOMC) will conduct its next monetary policy meeting on September 20-21, with markets increasingly pricing in a rate hike of 75 basis points (bps).
U.S. Bureau of Labor Statistics (BLS). "Consumer Price Index Summary: August 2022"
American Automobile Association (AAA). "AAA Gas Prices: Today's National Average"
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