Inflation Cools in August, But Is Still Up 5.3% Overall From Last Year
The Consumer Price Index rose .3% in August on a seasonally adjusted basis after rising .5% in July, the U.S. Bureau of Labor Statistics reported this morning.
Despite the increases, the figures are still below estimates. Economists surveyed by Dow Jones had been expecting a 5.4% annual increase in prices and .4% for the month of August, CNBC reports.
While this might finally be a sign that inflation is tapering off, the effects are still hitting consumers. The indexes for gasoline, household furnishing and operations, food, and shelter all still rose in August and contributed to the monthly all-times seasonally adjusted increase the BLS states. The energy index also rose 2%, mainly driven by the 2.8% increase in the gasoline index. The overall index for food rose .4%.
One of the more important metrics for the average consumer, the indexes for food at home and food away from both, both increased .4%. The BLS added that this increase was much smaller than increases in previous months. Overall, the food at home index rose 3% over the past 12 months, with the largest increase being the index for meats, poultry, fish and eggs with a whopping increase of 8%. This was mainly driven by a surge in the index for beef, which rose 12.2% over the year.
Increases were offset by significant price drop-offs in other sectors in August. The index for airline fares sharply fell, decreasing 9.1% in August alone. (If you’re thinking of booking a trip, now’s the time!) The index for used cars and trucks finally showed some reprieve, declining 1.5% in August ending what seemed like an unrelenting five consecutive months of increases. The index for motor vehicle insurance also dropped off, coming down 2.8% in August adding to the same decline it experienced in July.
Although the signs are promising, the sustained level of prices experienced over the last 12 months could be too big of a strain to keep rates suppressed. Yesterday, the New York Times reported: “Consumer price gains are beginning to cool off slightly, data due on Tuesday should show — but they are probably still climbing quickly enough to keep pressure on the White House and Federal Reserve.”
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