The rate of inflation rose even higher in August, which has led to many U.S. households feeling the effects of the price increase, despite the lower cost of gasoline. According to the Labor Department’s Tuesday statement, the consumer price index rose by 8.3% in August, when compared to what it was a year before. The prices also increased by 0.1% during the one month from July.
These figures were slightly higher than the ones Refinitiv economists had anticipated as they had noted an 8.1% inflation rate and a 0.1% decline. The higher rates are a concern for the Federal Reserves as they are looking to limit price gains, and to help consumers face the demand through increases in the interest rates. Stock futures were also not as expected with the Dow Jones Industrial Average being down by more than 400 points.
The core prices, that is prices not relating to volatile markets like food and energy, also increased by 6.3%. This was higher than the 6.1% forecast from economists. From April, May, June, and July to August the price spike was 0.6%. This is a worrisome sign because it shows that the pressure caused by inflation is still high.
The inflation rates have affected more U.S. households who are now forced to pay more for necessities like food and rent. The burden is also higher on low-income Americans whose paychecks are being stretched by price fluctuations.
The 5% reduction in energy prices will have been of some assistance to households over the past month.
Shelter costs have increased by 6.2%. This is the largest rate of increase since February 1991.