Inflation Eased Again in August but Remains High
U.S. inflation eased for the second straight month in August, but price increases remain stubbornly high despite efforts by the Federal Reserve to combat inflation by raising interest rates. While inflation is at a four-month low, it remains near 40-year highs. The Consumer Price Index (CPI) for All Urban Consumers, a measure of price changes commonly referred to as the inflation rate, was up 8.3% on an annual basis in August 2022, according to the Bureau of Labor Statistics. That was lower than the 8.5% annual increase in July and below the 9.1% hike in June which was the biggest year-over-year jump in prices since November 1981. Inflation has now remained at or near 40-year highs for 10 consecutive months, the biggest price surges since the severe economic recession of 1981-1982. The most recent increase in inflation was broad-based, with rising prices in energy and food being the largest contributors. Energy prices were up 23.8% in the year-ending August, with gasoline prices climbing 25.6%, but both of those measures were down from the previous month. The cost of shelter rose 6.2% over the past year, the largest 12-month increase since August 1990. Food prices continued to edge higher, climbing 11.4% on an annual basis, the largest 12-month increase since the year-ending May 1979. The price of new vehicles was up 10.1% in the year-ending August, though that was down from the July showing of 10.4%. The cost of used cars and trucks climbed 7.8% over the past 12 months, though that was a vast improvement from the roughly 20% to 40% increases over much of the past year. Additionally, the cost of airline fares was up 27.7% year-over-year in August but down from the 33.4% hike in July.