August brought a much-needed break from the high inflation levels caused by the pandemic after consumer prices rose following a hike in gasoline prices. Despite the jump, there is good news for Americans: The rise in inflation is likely to be temporary and reports are indicating that the overall inflation rate is returning to pre-pandemic levels.
In the United States, the Consumer Price Index (CPI) increased a total of 3.7 percent in August from the 12 months prior. While this is an increase from 3.2 percent in July, it is still considerably lower than the peak of 9.1 percent in June 2022. According to the U.S. Bureau of Labor Statistics (BLS), this rise was a result of an increase in gasoline prices.
The price of gasoline was 10.6 percent higher last month than it was during July. Currently, it costs an average of $3.84 per gallon according to AAA. This jump in gas prices had an impact on the CPI, accounting for more than half of the total rise. Unfortunately, transportation costs are already the second-largest expense for the average American household with rent being the first.
However, economists are adamant that despite this increase, the inflation rate is broadly on a downward trend and is likely to get back to pre-pandemic levels in the coming months. This information is echoed in the ‘core’ inflation measure, which strips out energy and food prices, both of which can be volatile from month to month. Core inflation fell to an annual rate of 4.3 percent in August from 4.7 percent in July.
Please think about donating below.