Consumer Price Index Updates – Brought to you by Curtis Dubay

The Consumer Price Index (CPI), the broadest measure of consumer prices, rose 3.7% annually in August, up from 3.2% in July. Inflation is down from the peak of 8.8% in June 2022 but still above the Fed’s 2% target rate.

• On a monthly basis, inflation rose 0.6% from July to August. This is much faster than from June to July when prices rose 0.2%.

• Gas prices and housing were the biggest contributors to inflation in August.

Be smart: Core prices, which strip out volatile elements like food and energy, rose 4.3% on an annual basis and 0.3% from July to August.

• The Federal Reserve looks at this metric closely. It is still high and hasn’t come down much since the Fed started raising interest rates in March 2022.

Why it matters: We are still far from getting inflation down to the 2% target.

• The stickiness of the core data likely means the Fed will have to keep future rate hikes on the table. Many expect it won’t raise rates again, but the data show more increases may be needed.

By the numbers:

• Wages rose 0.2% in August, only the second time this year that wages rose less than inflation on a monthly basis.

• Energy prices rose 5.6% from July to August, driven by a 10.6% jump in gas prices. Electricity rose by 0.2%.

• Housing rose 7.3% on an annual basis.

• Grocery prices rose 0.2% in August, up 3% annually

• Used car prices fell 6.6% from a year ago, but new car prices rose 2.9%.

Get Involved: Was this economic update interesting and relevant to you and your business? The author, Curtis Dubay, is the Chief Economist at the U.S. Chamber of Commerce – and he will be speaking at our Economic Forecast Brunch on October 13 alongside other industry experts. There’s still time to register for this event and get the inside scoop on America’s economy over brunch. Our Economic Forecast Brunch, and the rest of our Business Month agenda, is presented by DAPCPA.