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U.S. inflation in August 2024 rose by 0.2%, according to the latest Consumer Price Index (CPI) data from the Bureau of Labor Statistics (BLS). This marks a repeat of the 0.2% increase recorded in July, with shelter costs being the primary driver. Over the past 12 months, the All Items index grew by 2.5%, marking the smallest annual increase since February 2021, easing inflationary pressures but persistent cost increases in essential services such as housing.
The shelter index increased by 0.5% in August and accounted for over 70% of the total 12-month rise in the All Items Less Food and Energy index, which saw a 3.2% annual increase. Shelter costs have been a significant factor in the modest overall inflation, as Americans continue to experience higher rents and housing costs. Rent and owners' equivalent rent both increased by 0.4% and 0.5%, respectively, in August.
Food prices showed a marginal increase of 0.1% in August, driven by food away from home, which rose by 0.3%. However, the index for food at home remained unchanged for the month. Within the food at home category, the prices of meats, poultry, fish, and eggs rose 0.8%, while other categories, such as nonalcoholic beverages and fruits and vegetables, saw declines. Overall, food prices have risen by 2.1% over the past year.
The Energy index fell by 0.8% in August, with gasoline prices remaining flat, following no change in July. Gasoline prices have fallen by 10.3% over the past 12 months, contributing to an overall 4.0% decline in the energy index. Prices for natural gas and electricity also dropped by 1.9% and 0.7%, respectively, offering some relief to consumers facing energy costs.
The core inflation index, which excludes volatile food and energy prices, rose by 0.3% in August, slightly higher than the 0.2% increase in July. The August rise was fueled by increases in airline fares, transportation services, and motor vehicle insurance. However, used car prices fell by 1.0%, continuing a months-long trend of deflation in that category.
Over the last 12 months, inflation has increased by 2.5%, marking the lowest rate of annual inflation growth in over three years. While price pressures remain in certain sectors like housing and transportation, the sharp decreases in energy prices have helped slow the overall inflationary trend. Analysts point to this data as an indicator that inflationary pressures in the U.S. economy are beginning to cool off, though costs for essential services like shelter and medical care remain high.
Source: Bureau of Labor Statistics