Inflation rose again in August. The latest Consumer Price Index (CPI) report shows that, month-over-month, prices rose 0.6%, in line with estimates, while year-over-year, prices rose 3.7%, a tick higher than the expected 3.6%. When the more volatile food and energy prices are stripped out, prices rose 0.3% month-over-month, slightly more than the anticipated 0.2% and were up 4.3% year-over-year, which was in line with estimates. Higher gas prices were partly to blame for the increase. Yahoo Finance Live anchors Brad Smith and Julie Hyman breaks down the numbers.
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Inflation rose slightly in August, as the Consumer Price Index (CPI) increased by 0.6% month over month. The latest data released by the Bureau of Labor Statistics shows that the pace of inflation accelerated slightly, driven by rising prices in various sectors of the economy.

The increase in the CPI was driven by higher prices for gasoline, food, and shelter. Gasoline prices surged by 2.5% in August, marking the biggest monthly increase since June 2021. The spike in gasoline prices was largely attributed to supply chain disruptions and increased demand as the economy continues to rebound from the effects of the COVID-19 pandemic.

Food prices also saw a notable increase, with the cost of food consumed at home rising by 0.4% in August. This was driven by higher prices for meat, poultry, fish, and eggs, as well as non-alcoholic beverages. Additionally, the shelter index, which includes rent and homeownership costs, rose by 0.3% in August, contributing to the overall increase in the CPI.

Despite the rise in the CPI, core inflation, which excludes volatile food and energy prices, remained relatively stable, increasing by 0.1% in August. This suggests that the overall increase in the CPI was largely driven by temporary factors, such as supply chain disruptions and increased demand, rather than sustained inflationary pressures.

The Federal Reserve, which closely monitors inflation data, has indicated that it expects the current period of elevated inflation to be transitory. While the central bank has signaled its intention to start tapering its bond-buying program later this year, it has reiterated its commitment to keeping interest rates at near-zero levels for the time being.

The slight increase in inflation in August is likely to fuel ongoing discussions about the trajectory of price levels and the potential impact on monetary policy. Economists and policymakers will continue to closely monitor inflation data for any signs of persistent inflationary pressures that could prompt a change in the Fed’s approach to monetary policy.

Overall, the latest data on inflation paints a mixed picture of the economy, with some sectors experiencing price pressures while others remain relatively stable. As the economy continues to recover from the effects of the pandemic, the trajectory of inflation will be a key factor shaping the outlook for monetary policy and the broader economic landscape.