August CPI Holds at 3.4 Percent as Energy Costs Spike
Headline inflation remains unchanged while gasoline drives the monthly increase.
The US Consumer Price Index rose by 3.4 percent in August compared to the same month last year. This figure matches the 3.4 percent increase recorded in July. The monthly inflation rate stood at 0.4 percent on a seasonally adjusted basis. Core inflation, which excludes food and energy, accelerated to 2.4 percent year-over-year. This is lower than the 2.5 percent seen in the previous month.
Energy prices were the primary driver of the monthly increase. The index for energy components jumped by 16.3 percent over the last twelve months. Gasoline prices rose by 3.9 percent in August. Fuel oil prices surged by 10.1 percent. These increases offset declines in natural gas and electricity costs. GN markets/inflation (en-US) notes that renewed tensions with Iran are pushing up oil prices. This development keeps pressure on the Federal Reserve to consider a rate hike.
Shelter costs show mixed signals
The shelter index rose by 3.0 percent year-over-year in August. This is down from a 3.2 percent increase in July. Shelter accounts for more than 40 percent of the core CPI. On a monthly basis, the shelter index increased by 0.3 percent. This follows a 0.1 percent rise in the previous month. Both owners’ equivalent rent and primary residence rent rose by 0.2 percent.
Consumer goods prices stabilize
Prices for consumer goods showed signs of stabilization. This follows earlier impacts from tariffs. The food at home index remained unchanged in August. The food away from home index rose by 0.3 percent. Used car and truck prices increased by 0.4 percent. Airline fares rose by 2.7 percent. Lodging costs away from home increased by 2.4 percent. Medical care prices fell by 0.2 percent. Motor vehicle insurance costs dropped by 0.8 percent.
Trade conflicts may add pressure
Recent trade conflicts with Canada could add to inflation pressures. These effects may appear in coming months. The real rent index fell by 0.1 percent in August. This indicates that rent inflation is slower than core inflation. This metric provides insight into rental housing supply and demand conditions. The overall inflation picture remains sticky due to energy costs.
