Inflation Rises 0.1 Percent In August Even As Gas Prices Fall
The Consumer Price Index reports that annual inflation dropped from 8.5% in July to 8.3% in August, but month-to-month inflation rose 0.1% amid rising prices for food and other goods.
The primary cause for the drop in annual inflation came from gas prices, which fell 26% last month. Airfare also fell as summer travel ended and students returned from summer vacation to school.
But the month-to-month increase came elsewhere in the economy.
Those concerns point to the American consumer not being out of the woods yet as issues continue to mount.
According to the Wall Street Journal:
So-called core CPI, which excludes often volatile energy and food prices, increased 6.3% in August from a year earlier, up sharply from the 5.9% rate in both June and July—a signal that broad price pressures strengthened.
On a monthly basis, the CPI increased 0.1% in August from July, despite a sharp decline in gasoline prices. The core CPI rose 0.6% in August–double July’s pace.
While energy prices are down, food and other goods continued to rise throughout the month, sparking fears amid economists and investors.
Stock futures took a tumble Tuesday morning at the news, as the markets reacted to the new CPI data. Economists had predicted a lower annual inflation rate for August, and the 8.3 percent finding sent future tied to the S&P 500 down 1.4 percent, while contracts tied to the tech-oriented Nasdaq fell 1.9 percent.
Annual inflation was at its highest in June at 9.1%, a four-decade high. That number dropped sharply in July but that drop cooled going into August.