August Marks a Second Month of Increased Inflation
The price of goods and services increased for the second month in a row, capping the steady decline U.S. inflation saw for 12 straight months and getting further away from the Fed’s target. Costs were up 3.7% in the year-ending August, according to the Consumer Price Index (CPI) for All Urban Consumers measured by the Bureau of Labor Statistics. This increase topped the 3.2% growth seen in July and was quite a bit ahead of the recent low of 3% from June. Annual inflation as of August was a shade ahead of economists’ expectations of 3.6% and was notably beyond the Federal Reserve’s target of 2%. However, inflation has cooled considerably since reaching a 40-year high of 9.1% in June 2022. Accounting for over half of August’s price increase was the cost of gasoline, though the shelter index – which was up for the 40th consecutive month but also has a well-documented lag effect – also contributed. Excluding volatile food and energy prices, the core CPI increased 4.3% during the year-ending August, which was the lowest measure since September 2021.