The Consumer Price Index for All Urban Consumers (CPI-U) edged up by 0.1% on a seasonally adjusted basis in August, reported the U.S. Bureau of Labor Statistics. Year-over-year, prior to seasonal adjustment the all items index rose 8.3%.
The principal reason for the percentage increase seen in August was a rise in the food, shelter, and medical care indexes. Conversely, there was a 10.6% decrease in the price of gasoline for the month which counteracted percentage increases seen with other indexes.
“The indexes for shelter, medical care, household furnishings and operations, new vehicles, motor vehicle insurance, and education were among those that increased over the month,” explained the Bureau of Labor Statistics in its monthly report.
For American consumers, this means that they paid more for foodstuffs at the grocery store, shelter costs, and medical care costs among other areas of everyday life. The continued acceleration in inflation means many Americans are still grappling with meeting basic daily needs.
Given the fact that inflation is still at historically high levels, last week the Fed indicated that there would likely be a significant increase in interest rates later this month.
(Source: U.S. Bureau of Labor Statistics)
Food
In August, the index for food rose 0.8%. Since this time last year, American consumers have paid 13.5% more for foodstuffs at grocery stores. It should be noted that this was the highest year-over-year percentage increase seen since May 1979.
Grocery items that were the main contributors to the overall rise in the index included fruits and vegetables, eggs, meat, poultry, fish, cereal products, bakery products, dairy products, and nonalcoholic beverages. In addition, American consumers paid more to dine out at restaurants in August.
The Price of Gasoline
Conversely, American consumers enjoyed a bit of respite at the gas pumps in August. The price of gasoline dropped by 10.6%. This is the second consecutive monthly decline in gas prices following a 7.7% drop at the pumps seen in July.
In August, prior to seasonal adjustment, the price of gasoline dropped by 12.2%.
Over the last 12-month period, gasoline prices soared 25.6%.
Energy
In August, the energy index decreased 5%, largely due to the decline in gas prices. Yet, American consumers paid 1.5% more for electricity over the month. Likewise, the natural gas index also rose by 3.5%.
Since this time last year, the index for energy increased by 23.8%. Year-over-year, the price of fuel oil skyrocketed an astounding 68.8%. Natural gas prices likewise soared 33% since this time last year. In addition, over the last 12-month period, American consumers paid 15.8% more for electricity – the largest year-over-year rise since August 1981.
(Source: U.S. Bureau of Labor Statistics)
All Items Less Food and Energy
In August, the all items less food and energy index edged up 0.6%. American consumers continued to pay more for shelter, as the index rose 0.7% over the month.
Rent prices also increased 0.7%, as did the index for owners’ equivalent rent, which is correlated to the value of housing prices.
Moreover, Americans also paid 0.7% more for medical costs over the month. In August, all major medical care composite indexes saw percentage increases. The hospital services index rose 0.7%, the price of prescription drugs grew by 0.4%, and the physicians’ services index also edged up by 0.2%.
Over the last 12-month period, the all items less food and energy index increased by 6.3%. Year-over-year, the composite index for shelter increased by 6.2%, which contributed to roughly 40% of the total growth of the index for all items less food and energy.
Likewise, American consumers paid 5.4% more for medical care since this time last year.
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Source Cited: https://www.bls.gov/news.release/archives/cpi_09132022.htm
Sarah has been writing on the topics of politics, history and finance for over a decade. She is currently an editor at CPI Inflation Calculator, covering the topics of CPI, inflation, US economy and economic commentary.
