Even with gas prices retreating (and we’ll she how long that lasts as we drain the strategic reserves), inflation is still at a record setting pace of 8.3%.
Consumer prices ticked up during the month of August, bucking expectations that inflation would fall slightly, the Labor Department said on Tuesday.
Why it matters: Costs for shelter and food continued to jump, though plummeting gasoline prices helped ease overall price gains.
Driving the news: Overall consumer prices rose 0.1% last month — after dropping to zero in July — and are up 8.3% over the past year. That compares to the 8.5% year-over-year figure reported in July.
Core inflation, which strips out volatile food and energy prices, rose 0.6% last month — a marked increase from July’s 0.3% pace. Compared to a year ago, core inflation is up 6.3% (compared to the 5.9% increase in July).
The backdrop: The Federal Reserve has been raising interest rates aggressively — with another super-sized hike on the table next week — to cool inflation. Fed officials have indicated they aren’t likely to back off until there’s a meaningful, sustained cooling in price gains.
Where it stands: Much of the inflation relief, though, has come from a sharp drop-off in energy prices.
Global energy prices rose to staggering levels after Russia invaded Ukraine. Prices started to reverse course earlier this summer and continued a lengthy stretch of declines. That could help future inflation readings.
The national average price of gasoline is $3.71 as of Tuesday, down more than 25% from its peak in June.
2022-09-13 Inflation rises in August as gas prices cool Courtenay Brown