Prices for American consumers rose 3.7% in August as gasoline prices rose, according to the Bureau of Labor Statistics.
Inflation was almost in line with experts’ estimates and prices rose at a faster pace than last month.
Economists expect the data to show an overall increase in inflation of 3.6% compared to a year ago. This is the second time the year-on-year inflation measure has increased since July after 12 consecutive months of decline.
Core inflation, a measure of cost increases that strips out energy and food prices for their volatility, rose 4.3% percent. It is also in line with the experts’ estimates.
The Federal Reserve has recently focused on core inflation as it tries to control inflation.
Overall, the central bank’s efforts seem to be paying off. Headline inflation was 3.2% in July compared to July 2022, while core inflation was 4.7%.
Sarah House, senior economist at Wells Fargo, said that inflation gradually decreased, but increased in August due to the reduction in oil production, which led to higher fuel prices.
“The most important thing (Wednesday) is what happens not only in terms of core numbers, but what the underlying factors are,” House said in an interview, referring to the inflation metric that excludes food prices. and inflation. energy.
“It looks like the push for lower inflation. We still have a lot of disinflationary pressures,” meaning that the current economic situation has helped to continue to reduce inflation.
He added that gas prices typically fall in August when consumers start driving less, but this year marks a break from that pattern. That caused further increases in gas prices.