Consumer Price Index Up 8.3% In August

Brian Turner
13 Sep, 2022
New York City

Inflation continued to stay elevated and rapid price increases spread beyond crude oil and gasoline prices. 

Consumer prices in August rose at a slower pace of 8.3% in August following a rise of 8.5% in July, the Bureau of Labor Statistics said Tuesday. 

Consumer prices in August rose 0.1% from July when prices were flat from the previous month.  

Consumer prices rose at a slower pace annually in August but still remained elevated and significantly above the 2% target set by the Federal Reserve.

The inflation index was driven higher by broad-based increases in the food price index of 11.4%, the housing index of 6.2% and the medical care services index of 5.6%. 

The food price index rose at the fastest pace since May 1979 and the housing price index increased at the fastest pace since 1984. 

However these increases were offset by slower gains in the energy price index of 23.8% from 32.9% in July. 

Core inflation, excluding food and energy, rose 0.6% in August from the previous month or 6.3% from a year ago. Monthly price increase was the most since March and higher than 5.9% both in June and July. 

Benchmark indexes have been rallying for a week  on the hopes of cooling inflation and discouraging the Fed from lifting rates by another large amount. 

However, the latest elevated inflation report only strengthened the case for lifting key lending rates again by 75 basis points at the next Fed's meeting later this month. 

The S&P 500 index dropped 3.1% to 3,984.09 and the Nasdaq Composite index plunged 4.1% to 11,722.61. 

Crude oil declined 39 cents to $87.35 a barrel and natural gas rose 5 cents to $8.30. 

The yield on 2-year Treasury notes rose to 3.74%, 10-year notes advanced to 3.43%, and 30-year bonds to 3.54%.