Consumer Price Index Continues to Rise in August

The Consumer Price Index (CPI) was up again in August, with continuing increases in gasoline, food, shelter and clothing. The Bureau of Labor Statistics (BLS) reported a 0.4% (SA) increase in the CPI for All Urban Consumers in August, the thirteenth month-to-month gain over the past 14 months. Compared to August 2010, the all-items index is up 3.8% (NSA).

 

The increase in the all-items index was broadly based, with each of the index’s major components contributing to the rise. The energy index rose 1.2% (SA), the food index advanced 0.5% and the core index was up 0.2%. The recent declines in oil prices have been slow to flow though to the pump, with gasoline prices up 1.9% (SA), although they were down 0.5% before seasonal adjustment. Food prices maintained their steady rise, with notable increases in the price indexes for cereal and baked goods (+1.1% SA), dairy (+0.9%), and fresh fruit and vegetables (+0.6%).

Despite weak retail sales, clothing prices have been rising strongly over the past three months, with the apparel index up 1.1% in August. Women’s and girl’s clothing have been the main driver of this increase with this category up 2.1% in August.

The shelter index rose steadily for the 11th consecutive month, inching up a further 0.2% in August. Overall, the shelter index is up 1.6% (NSA) relative to August 2010. Owners’ equivalent rent and rent of primary residence maintained their steady rates of growth, up 0.2% and 0.4%, respectively. In the past year, these subcomponents have risen 1.4% and 2.0%, respectively. Conditions in the market for rental housing have been firming in recent months and August was no exception following the largest increase in the rent of primary residences index since mid-2008.



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