Inflation continues to be difficult to rein in, raising to 3.7 percent in August.
According to the new consumer price index numbers released by the U.S. Bureau of Labor Statistics Wednesday, annual inflation increased from 3.2 percent in July to 3.7 percent in August. Inflation had hit its low point since March 2021 in June.
The latest rise of the inflation rate comes a week before the Federal Open Market Committee meets Sept. 19-20 to consider interest rates. The FMOC in July raised its target rate for federal funds by 25 basis points to 5.25 to 5.5 percent. It was the 11th hike since early 2022.
The Federal Reserve remains committed to its target of shrinking inflation to 2 percent. In his remarks following news of the latest hike, Federal Reserve Chairman Jerome Powell said a decision on another possible rate increase would be dependent on the consumer price index reports for July and August and the labor reports. The latest jobs reports showed a slowing in new jobs being added and a slight rise in unemployment. But the inflation is moving in the other direction.
The 3.7 percent rate of inflation is the highest since May, which was 4 percent.
The core index, minus the volatile food and energy prices, was down from July at 4.3 percent. The food index has increased 4.3 percent in the past 12 months.
The CPI rose 0.6 percent in August. It increased by 0.2 percent in July.
“The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase,” the BLS reported. “Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month.”
The index for used cars and trucks decreased by 1.2 percent. In the past year, used vehicles are down 6.6 percent on the index.
Along with higher gas prices, vehicle consumers continue to see car insurance increase. Insurance rates are up 19.1 percent in the past 12 months. It was a second straight month to see insurance rise by 2 percent.
