Consumer Prices Increase in August

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Both the CPI and “core” CPI continued to increase in August, as food and energy prices increased slightly.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.4% in August on a seasonally adjusted basis, slower than a 0.6% increase in July. Excluding the volatile food and energy components, “core” CPI rose by 0.4% in August, after an increase of 0.6% in July. The August increase in the seasonally adjusted all items index was broad. The indexes for shelter (0.1%), recreation (0.7%), household furnishings and operations (0.9%), apparel (0.6%), motor vehicle insurance (0.5%), and airline fares (1.2%) all rose. The index for used cars and trucks rose by 5.4% in August, accounted for over 40% of the increase in the “core” CPI. Meanwhile, the indexes for education (-0.3%) and personal care (-0.3%) declined in August.

In August, the price index for a broad set of energy sources rose by 0.9%, after an increase of 2.5% in July. It was the third straight increase in energy prices following five consecutive declines at the beginning of 2020, from January to May. The food index increased by 0.1% in August, following a 0.4% decrease in July. The index for food at home decreased slightly by 0.1% in August after decreasing 1.1% in July. The index for food away from home continued to rise in August.

During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 1.3% in August, following a 1.0% increase in July. Meanwhile, the “core” CPI increased by 1.7% over the past twelve months, after a 1.6% increase in July. The food index rose by 4.1% and the energy index declined by 9.0% over the past twelve months.

BLS data collection in August was again affected by the COVID-19 pandemic. BLS mentioned in the today’s news release that many indexes are based on smaller amounts of collected prices than usual, and a small number of indexes that are normally published were not published this month.



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