The cost of living in August declined for the first time in seven months, pulled lower mostly by cheaper gasoline, according to government report released Wednesday, September 16.
US inflation over the past year, however, remained the same even as energy prices plunged.
Consumer prices slipped 0.1% in August, their first drop since January, after climbing 0.1% in July, the US Labor Department summarized in a monthly report on the Consumer Price Index. The CPI measures what Americans pay for everything from cars to cloths to healthcare.
"Inflation is still relatively muted," Bloomberg News quoted Gregory Daco, head of U.S. macroeconomics at Oxford Economics USA in New York. "We continue to see pass-through from a strong dollar and low energy costs."
Prices at the pump tumbled 4.1% last month, the most since January, and after three straight monthly gains. They have plummeted 23.3% from a year ago. The broader price category for energy declined 2.0% after edging up 0.1% previously, and is down 15% over the past year.
While American consumers are paying less driving to the grocery store they still have to spend more once they get there. Food prices grew 0.2% in August, matching their gain in July. They are 1.6% higher than a year ago. Eggs continue to cost more, up 7.7% last month alone and a whopping 35.3% over the past year.
Stripping away energy and food, so-called core consumer prices increased 0.1% in August, the same gain as in July.
"The index for shelter rose, as did the indexes for apparel, tobacco, and alcoholic beverages," the BLS report said. "However the index for airline fares declined sharply, and the indexes for household furnishings and operations, recreation, and used cars and trucks also decreased in August."
Two major categories were unchanged, including overall prices on new vehicles and medical care services.
In the more extended annual period, US inflation rose 0.2% in the 12 months ended August, marking the same annual inflation rate as in July.
Finally, in rounding out the Labor Department’s report and for a third month in a row, core US inflation increased 1.8% on an annual basis. This 12-month reading is the benchmark inflation rate monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate. The Fed has a 2% annual inflation target.
Here is "yet another indication that the Fed has not yet met their mandate needed to initiate tightening: inflation, or lack thereof," MarketWatch quoted Lindsey Piegza, chief economist at Stifel.
Inflation data follows. The table showing monthly and annual percentage changes in the prices of major consumer goods and services that the US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) surveys, analyzes and then summarizes in monthly reports.
February 2014 – August 2015 Consumer Prices – Gains & Losses in Percent
|Feb 2015||Mar 2015||Apr 2015||May 2015||June 2015||July 2015||August 2015||12 Month|
|Food at home||0.1||-0.5||-0.2||-0.2||0.4||0.3||0.3||0.8|
|Food away from home||0.3||0.2||0.2||0.2||0.2||.0||0.2||2.7|
|Gasoline (all types)||2.4||3.9||-1.7||10.4||3.4||0.9||-4.1||-23.3|
|Utility (piped) gas service||-2.0||-2.7||-2.6||.0||0.3||-1.4||1.3||-11.5|
|All items less food, energy||0.2||0.2||0.3||0.1||0.2||0.1||0.1||1.8|
|Commodities less food, energy||0.2||0.3||0.1||-0.1||-0.1||-0.1||-0.1||-0.5|
|Used cars and trucks||1.0||1.2||0.6||-0.4||-0.4||-0.6||-0.4||-1.5|
|Services less energy||0.1||0.2||0.3||0.2||0.3||0.2||0.1||2.6|
Bureau of Labor Statistic data on US inflation is typically published around mid-month. The information details consumer prices through to the previous month. Consumer Price Index data with September inflation and through to the latest annual period becomes public on October 15, 2015.
CPI data is used in calculating inflation rates and it is the backbone for this site’s inflation-adjusting calculator. The US Inflation Calculator provides accumulated inflation and the change in buying power of the dollar over time.