U.S. prices for a wide range of consumer goods increased lower than expected in August, indicating that inflation might be starting to cool.
Source: U.S. Department of Labor.
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The consumer price index increased 5.3% from a year earlier and 0.3% from July. A month ago, the consumer prices increased 0.5% from June.
Excluding volatile food and energy prices, the CPI increased slightly by 0.1% for the month versus. The 0.3 estimate, and 4% on the year against the expectation of 4.2%.
The 5.3% increase still sustains inflation at its hottest level in nearly 13 years, though the August figures indicate the rate may be easing off.
Energy prices accounted for the larger size of the inflation increase for the month, with the wider index up 2% and gasoline prices increasing 2.8%.
Used cars and trucks, which has been a major contributor of the core inflation gains, dropped 1.5% in August but remains up 31.9% YOY. New vehicle prices increased by 1.22%.
The Fed has been observing inflation closely but have largely argued this year’s inflation will be temporary and due to factors that will dissipate soon.