(Editor’s note: This story has been updated.)
Coming down a bit since a four-decade high in June, the August Consumer Price Index report puts national inflation at 8.3 percent, a slight drop driven primarily by sharply falling gas prices throughout the month. However, there are still inflation concerns as the price of food continues to rise throughout the country.
The good news for consumers is that gas prices have fallen roughly 26 percent since last month. Airfare is also down as summer travel wound down and students began returning to school.
But, according to the Wall Street Journal, a primary area of concern is still rising food prices. As a result, while the annual number may be down, month-to-month inflation rose 0.1 percent.
Still, food prices continued to climb this past month and prices for a range of goods and services remained much higher than a year earlier, the figures show.
“Consumers are getting relief at the pump and there should be further relief coming at the gasoline station and the grocery store, since one of the biggest costs of food is transporting it,” said Ryan Sweet, senior director of economic research at Moody’s Analytics.
Broad price pressures have proven resilient, causing the Federal Reserve to keep raising interest rates to fight inflation, said Kathy Bostjancic, chief U.S. economist at Oxford Economics.
“Inflationary dynamics are improving and moving in the right direction,” she said. “But they’re still running way too hot for comfort, either for individuals and businesses or the Federal Reserve.”
The news is not good for the American consumer. Core CPI, which excludes volatile energy and food prices, went up sharply in August. But as gas prices leveled out, inflation fell at a much slower pace from July to August, and those pressures on food and goods prices show no immediate signs of easing.
Gas prices are down, but here’s why Americans are still feeling the sting of inflation:
Food at home up 13.5% in past year – largest since 1979
Rent is up 6.7% in past year – largest since 1986
Electricity up 15.8% – largest since 1981
Health insurance 24.3% – largest ever inc
— Heather Long (@byHeatherLong) September 13, 2022
The report has many economists concerned, and 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.
Obama’s NEC director on eve of Biden White House celebration of Inflation Reduction Act: “Broad-based relief not coming.” https://t.co/IlbbOSWlnd
— Philip Melanchthon Wegmann (@PhilipWegmann) September 13, 2022
American consumers are clearly not out of the woods yet with continued price increases outside of the gas pump, and even with energy, prices are still far higher than they were a year ago, causing more concern among middle and lower class Americans.