Consumer prices are increasing once again after a short reprieve in July from the worst inflation in forty years.
The Consumer Price Index increased by one-tenth of a percentage point from one month earlier, according to the Bureau of Labor Statistics. The CPI increased by 8.3 percent year over year.
Both values exceeded expectations. The CPI was projected to increase by 8.1 percent from a year ago by economists. It was anticipated that the monthly change would decrease by 0.1 percentage points. According to the Labor Department, the CPI was steady from June and up 8.5 percent from a year earlier in July. Prices increased 1.3 percent from the previous month and 9.1 percent from a year ago in June.
The worst inflation the economy has seen in more than 40 years. The August year-over-year total, excluding those from this spring, is the highest since 1981. The inflation in August was pervasive, hitting everything from food to brand-new automobiles and other durable commodities to services and housing. The one exception was the dramatic drop in gasoline prices since July.
The statistics dash expectations that inflation may have peaked and is already on a downward trend. In Boston yesterday, President Joe Biden said he thought inflation was now in the rearview mirror.
According to Biden, “the American people should have faith that we’re on the right road and that we’re really making progress.”
When food and energy costs are removed, core prices increase by 0.6 percent, which is twice as much as anticipated. Core CPI is up 6.3 percent from a year earlier.
The cost of groceries has skyrocketed and is continuing to increase quickly. In comparison to July, prices increased by 0.7 percent in August. Home food costs increased 13.5 percent from August of previous year.
The cost of eating out is rising. Restaurant costs increased by 0.9% from the previous month and are now 8% higher than they were a year ago.
August saw an increase in what is known as foodcore inflation, or core inflation plus food. Prices increased by 0.6 percent as opposed to 0.4 percent in July. Foodcore inflation is up 7.1 percent from a year ago.
In comparison to a year before, service prices increased 6.8 percent, or 0.7 percent.
Prices for products other than food and energy increased by 0.5 percent in comparison to July, accelerating from a 0.2 percent increase in June. Prices for essential items increased 7.1% from a year earlier. Prices for durable goods increased by 0.5 percent from the previous month’s 0.3 percent. Prices for durable goods increased 7.8% from a year earlier.
The total index was held back by the 10.6% month-over-month drop in gasoline prices. The cost of fuel has increased by 25.6% since last year.
Due to a shortage of new vehicles on the market, used car prices, which surged both last year and in the first half of this year, decreased by 0.1 percent. The cost of secondhand cars decreased by 0.4% in July. Prices for secondhand cars are up 7.8% from a year ago. August saw an increase in new automobile costs of 0.8 percent, bringing the year-over-year increase to 10.1 percent.
Rentals and an estimate of an equal theoretical expenditure for owner-occupied dwellings are included in the calculation of shelter prices, which increased by 0.7 percent and are up 6.2 percent from a year ago. The cost of utilities is rapidly rising. Prices for electricity increased by 1.5 percent, bringing the annual increase to 15.8 percent. Prices for piping natural gas services increased by 3.5 percent and have increased by an astounding 33 percent since last year.