Inflation in the United States eased a bit with gains in consumer prices slowing some in August, according to government data released Tuesday, Sept. 14.
Although underlying inflation pressures softened somewhat last month, Americans continued to pay significantly more for food and energy as compared to a year earlier.
In the headline monthly figure, U.S. consumer prices rose 0.3% in August after climbing 0.5% in July, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from eggs to energy. As recently as June, the level hit 0.9% for the biggest 1-month increase since June 2008. The gain in August was the smallest since January.
In several key consumer pricing categories:
Prices at the pump picked up 2.8% last month from 2.4%. Gasoline prices soared 42.7% year-over-year.
The broader index for energy, which combines items like gasoline, electricity and fuel oil, rose 2.0% in August from 1.6% in the prior month. Energy prices advanced 25% in the past 12 months.
- Prices for food increased last month by 0.4% from 0.7%. Food prices rose 3.7% year-over-year.
Excluding the more volatile food and energy components, core consumer prices edged up 0.1% in August for the smallest increase since February and after rising 0.3% in July. By contrast, they grew 0.9% in the months of April and June, marking the highest levels since April 1982.
"Along with the indexes for household operations and shelter, the indexes for new vehicles, recreation, and medical care also rose in August. The indexes for airline fares, used cars and trucks, and motor vehicle insurance all declined over the month," the Labor Department’s monthly report said.
Shelter or housing costs for the month rose 0.2% from 0.4%. They increased 2.8% from a year earlier. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. The index accounts for about one-third of the entire CPI.
New vehicle prices moved ahead 1.2% from 1.7% previously, and registered 7.6% higher than a year earlier.
The cost of health care rose 0.2% last month after increasing 0.3% in July. Health care prices advanced 0.4% year-over-year.
Used car and truck prices fell 1.5% in August, for their first monthly decline since February. After February, they marked successive monthly increases of 0.5%; 10%; 7.3%; 10.5%; and 0.2%. They are 31.9% higher than a year ago.
"The hot inflation streak cooled considerably in August, especially with used car prices taking a big drop after inflating CPI for months," MarketWatch quoted corporate economist Robert Frick of Navy Federal Credit Union.
Of note, airline fares sank 9.1% over the month.
In the headline annual figure, inflation in the United States increased 5.3% in the 12 months ended August. At 5.4% in the annual periods ending June and July, the rate of inflation was the highest since August 2008 when oil topped $150 a barrel.
Core inflation rose 4.0% over the past 12 months, slowing from the previous 4.3% increase. In the 12-month period ended June, the core rate at 4.5% was the highest since November 1991. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.
"Inflation remains troublingly strong, even if it is not exploding like it did earlier in the year," Reuters quoted James McCann, deputy chief economist at Aberdeen Standard Investments in Boston. "If we continue to see further step-downs in inflation over the next six months, that should ease the pressure on the Fed to quickly follow tapering with interest rate rises."
The following table of key inflation figures is for the last seven months through August, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on September 14, 2021. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.
February to August 2021 Consumer Prices – Gains & Losses in Percent
|February 2021||March 2021||April 2021||May 2021||June 2021||July 2021||August 2021||12 Month|
|Food at home||0.3||0.1||0.4||0.4||0.8||0.7||0.4||3.0|
|Food away from home||0.1||0.1||0.3||0.6||0.7||0.8||0.4||4.7|
|Gasoline (all types)||6.4||9.1||-1.4||-0.7||2.5||2.4||2.8||42.7|
|Utility (piped) gas service||1.6||2.5||2.4||1.7||1.7||2.2||1.6||21.1|
|All items less food, energy||0.1||0.3||0.9||0.7||0.9||0.3||0.1||4.0|
|Commodities less food, energy||-0.2||0.1||2.0||1.8||2.2||0.5||0.3||7.7|
|Used cars and trucks||-0.9||0.5||10.0||7.3||10.5||0.2||-1.5||31.9|
|Services less energy||0.2||0.4||0.5||0.4||0.4||0.3||.0||2.7|
The BLS releases inflation data around the middle of a month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for September and the latest annual period become public on October 13, 2021.
CPI data is used in calculating inflation rates and in this site’s U.S. Inflation Calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.