Inflation took a breather in August, coming down from a 13-year high. Still, price increases remain uncomfortably high compared to before the pandemic.
Consumer prices rose 5.3% in the year ended in August, slightly less than the 5.4% increase in June and July, the Bureau of Labor Statistics said Tuesday. Stripping out more volatile items like food and energy, prices rose by 4%, also a smaller increase than in July.
For the month of August alone, consumer prices rose 0.3% adjusted for seasonal swings. It was the second straight month in which the inflation rate fell slightly. Without food and energy, prices rose 0.1% for the month, the smallest increase since February.
Prices for airline tickets and car insurance declined in August. And used car prices in August declined for the first time since February.
Over the past 12 months, used car prices are still up a whopping 31.9%. Demand for used cars has been sky-high throughout the pandemic as people sought alternatives to public transportation. Also hurting prices: new car production was hampered by a global chip shortage.
Inflation remains well above the Federal Reserve’s target of around 2%. The Fed has signaled that it intends to wind down some of its emergency economic stimulus imposed last year when the pandemic began. That could keep inflation in check. But it also risks slowing the economy when the Delta variant appears to be hindering job growth.
This is a developing story. It will be updated.
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