The federal government’s Bureau of Labor Statistics (BLS) released new price inflation data last week, and according to the report, price inflation during August accelerated, coming in at the highest year-over-year increase in three months. According to the BLS, Consumer Price Index (CPI) inflation rose 3.7 percent, year over year, in August before seasonal adjustment. That’s up from July’s year-over-year increase of 3.2 percent, and August is the twenty-ninth month in a row with CPI inflation above the Fed’s arbitrary two-percent inflation target. (More precisely, the Fed targets a two-percent rate in the core PCE measure. In August, the year-over-year change in the core PCE was double the target at 4.2 percent.)
Meanwhile, month-over-month CPI inflation rose 0.6 percent (seasonally adjusted) from July to August. That’s the highest month-over-month change in 16 months. August’s year-over-year growth rate is down from last August 2022’s year-over-year growth rate of 8.3 percent.
(This all assumes federal CPI numbers are reliable and accurate. For more on how these numbers are of dubious reliability in practice, see Jonthan Newman’s article from last week: “Current CPI Inflation is Worse than Reported.”)
August’s acceleration in inflation rates may suggest that recent predictions of price inflation being “over” are premature. The narrative that price inflation has already melted away has never been accurate, of course. Price inflation has hardly vanished, it has only slowed. Moreover, after months of near 40-year highs in price inflation during most of 2022, a mere slowing of inflation does nothing to reverse the growing cost-of-living issues that many American consumers continue to face.
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