Inflation Continues to Rise as Gasoline Prices Drop Below $4/gallon
The Bureau of Labor Statistics released the Consumer Price Index for All Urban Consumers today, which rose 0.1% in August. Over the last 12 months, the “all items” index increased 8.3%. The U.S. Consumer Price Index report for August showed:
The food index increased 11.4% over the last year, the largest 12-month increase since May 1979. The index for electricity increased by 15.8%, the biggest 12-month increase since 1981. The index for natural gas increased 33% in the latest 12 months.
Price increases for shelter, food, and medical care were the largest of many contributors to the total increase. The overall data would have been worse without a big drop in gasoline prices during the month of August. The gasoline index fell 10.6% in August following a 7.7% drop in July, but it was still 25.6% higher than a year earlier.
The announcement triggered the stock market to lose nearly 1,300 points, the largest single-day drop since the pandemic began. The continuing inflation increases the chance that the U.S. Federal Reserve will sharply increase interest rates at its meeting next week. Click here to read more from the Bureau of Labor Statistics.