Gas prices drive inflation up 0.6 per cent in August

The increase in prices comes despite interest rate increases from the Federal Reserve

Eric Garcia
Wednesday 13 September 2023 15:38 BST
Credit Card Debt On the Rise Amid High Inflation & Interest Rates

A spike in gas prices caused US inflation to increase by 0.6 per cent in August, which was higher than the 0.2 per cent increase in July, according to the Consumer Price Index report released on Wednesday.

The report showed that inflation also increased rose by 3.7 per cent in the past 12 months.

The price index for gasoline increased by 10.6 per cent last month compared to 0.2 per cent in July. Still, the index for gasoline declined 3.3 per cent in the past 12 months.

The price index for food increased by 0.2 per cent in August, mirroring the increase it had in July.

The price for meats, poultry, fish, and eggs increased by 0.8 per cent, but the index for pork increased 2.2 per cent. The index for cereal and bakery products rose by 0.5 per cent.

The index comes as President Joe Biden has touted his “Bidenomics” policy as he seeks re-election.

Mr Biden spent much of the last month touting the one-year anniversary of the Inflation Reduction Act, the landmark climate and health care legislation law he passed when Democrats still controlled the House and Senate. The Biden administration also announced that it would begin Medicare’s negotiation on drug prices with pharmaceutical companies on ten drugs for seniors.

The increase in inflation comes as the Federal Reserve has dramatically increased interest rates as a way to temper a hot labour market that has caused inflation to spike. In July, the Federal Reserve raised interest rates to the highest number it had been in 22 years.

The central bank is set to meet again later this month, when it will announce whether it will once again raise interest rates.

But there are signs that the labour market is not as robust as it once was. The US economy added 187,000 jobs last month, which beat expectations, but the Bureau of Labor Statistics revised the number of jobs added in June from 185,000 to 105,000 and the number of jobs added in July down from 187,000 to 157,000.

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