Rising Grocery Prices Pushed Annual Inflation to 8.3 Percent in August
After a one-month break, inflation took off again in August as prices rose by 0.1 percent overall despite falling gas prices.
Prices have climbed by 8.3 percent over the past 12 months, according to the consumer price index (CPI) data released Tuesday morning by the Department of Labor. That’s down from the 8.5 percent mark in July, but the uptick in August’s monthly figure seemingly puts an end to hopes that prices were finally cooling after a year of increases, the likes of which hadn’t been seen since the 1970s.
But, wait, how can inflation be rising and yet be down from the tallies announced in both June and July? That’s because the annualized rate—the 8.3 percent number—is the sum of the past 12 monthly figures. Prices rose by 0.1 percent in August, but this month’s annualized rate drops from last August’s monthly rate of 0.3 percent. So the annual figure declined even though inflation rose last month.
The specifics of Tuesday’s report are more important—and possibly even worse—than the topline figure. So-called “core CPI,” which filters out the more volatile categories like food and fuel prices, rose by 0.6 percent in August. In short, falling gasoline prices helped to offset broader and more pernicious inflation across the rest of the economy.
This is in some ways the reverse of the situation the country faced earlier this year. In March and April, for example, high and quickly rising gas prices were driving overall inflation. Now, gas prices are declining, but inflationary pressure has moved along to other areas of the economy—areas where it is likely to be harder to extinguish.
After a month where it was low, core inflation comes in hotter than expected.
But what stands out to me is that it’s right in line with the average value from October 2021 through June 2022 – core has been, sadly, co
Article from Reason.com