The Increase in Gasoline Prices in the United States Boosted Inflation
The increase in gasoline prices in the United States pushed up the overall inflation rate, marking the second consecutive month of upward movement.
On a monthly basis, consumer prices rose by 0.6% in August, the largest increase in over a year. However, gasoline prices in the United States surged by almost 11%.
The rise in gasoline prices in the United States drove inflation in August. It is worth noting that most other categories saw more moderate increases, indicating that, overall, the upward pressure on prices is easing.
In a set of conflicting data released on Wednesday, the Department of Labor reported that the Consumer Price Index (CPI) increased by 3.7% in August compared to the same month the previous year, up from the 3.2% annual rate recorded in July.
However, the so-called core inflation, which excludes more volatile items like food and gasoline, rose by 4.3%, a decrease from the 4.7% registered in July and the smallest increase in nearly two years.
Nevertheless, this remains well above the Federal Reserve’s target of 2%.
Despite the divergent trends, the decline in core inflation suggests that overall inflation is moderating.
The Federal Reserve pays closer attention to core inflation as it considers it a better indicator of price movements.
The figures from Wednesday make it likely that the U.S. central bank will refrain from raising interest rates at its upcoming meeting next week.
While higher gasoline prices may contribute to inflation this month as well, most economists believe that inflation will gradually subside for the remainder of the year.
In August, consumer prices rose by 0.6%, marking the largest increase in over a year.
Gasoline prices increased by almost 11%, although they have stabilized recently, with the national average gasoline price at $3.85 per gallon on Wednesday, the same as the previous month.
The sharp increase in gasoline prices accounted for more than half of the inflationary pressure in the month, according to the government.
Also read: Mexican Stock Markets Down Due to U.S. Inflation.
