Inflation Still Near Four-Decade High Despite Drops in Gasoline Prices | Eastern North Carolina Now | The Consumer Price Index (CPI) rose 0.1% in August after remaining constant in July according to the latest release from the Bureau of Labor Statistics. On an annual basis, prices have increased 8.3%. This number would have been markedly higher if not for declining gas prices.

Coronavirus Disease 2019 (COVID-19)
    Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Paige Terryberry.

    The Consumer Price Index (CPI) rose 0.1% in August after remaining constant in July according to the latest release from the Bureau of Labor Statistics. On an annual basis, prices have increased 8.3%. This number would have been markedly higher if not for declining gas prices.

    The gasoline index declined 10.6% over the month, helping to drive a decrease in the broader energy category in August. Even so, the gasoline index is still up 25.6% over the year.

    The recent decline in prices at the pump is likely at least partially attributable to the Biden Administration's decision to drain 180 million barrels from the Strategic Petroleum Reserve (SPR), which is now at the lowest level since 1985, according to Reuters. The SPR release began in May and is set to stop in October, suspiciously close to midterms. Overall inflation is likely to jump should gas prices climb again.

    Meanwhile, utilities, shelter, and medical care services are up 3.5%, 0.7%, and 0.8% over the month, respectively. Utility prices are up a whopping 33% over the past year.

    The food index rose 0.8% in August and 11.4% over the year. The 0.8% increase is dramatic, yet it represents the smallest monthly increase for the index since December 2021.

    In addition to the energy category, used car and truck prices were also down in August. Every other category, however, saw prices grow in the same time period.

    So-called core inflation, which strips out food and energy, rose 0.6% in August, for an annualized rate of 6.3%. This level is up from the 5.9% registered in July, and remains at rates not seen in 40 years.

    The Federal Reserve raised interest rates 0.75% twice since June, in addition to smaller hikes in March and May. Now, the central bank may approve another increase at their upcoming policy meeting next week in hopes of decreasing the money supply and bringing down prices. The federal funds rate targeted by the Federal Reserve impacts what banks charge on loans - but also can impact car and credit card payments.

    CPI's annual rate has been running at 5.0% or more since May of 2021. As the Federal Reserve continues to make gradual changes this late in the game, workers' budgets are hurting. Real average hourly earnings increased 0.2% in August, but decreased 2.4% since last year.

    Government deficit spending and money printing caused today's inflation. Though Washington has moved on to other headlines, inflation continues to impact the average American's wallet every day, preventing them from saving for the future and causing some to sacrifice their dreams. Inflation is an implicit tax on workers, harming the poor most. Taking the blame for inflation, though, will never be politically popular for Washington's out-of-touch elite.
Go Back

Leave a Guest Comment

Your Name or Alias
Your Email Address ( your email address will not be published)
Enter Your Comment ( no code or urls allowed, text only please )

DOJ refuses to release secret plan to influence 2022 election Economic Truths, A Business Perspective, John Locke Foundation Guest Editorial, Editorials, Business, Op-Ed & Politics Asheville Sees 31% Surge in Violent Crime


Latest Op-Ed & Politics

An assistant U.S. attorney found to have sexually assaulted his or her date will not be held accountable by prosecutors.
As part of ongoing celebrations for Latinx Heritage Month, millions of revelers gathered to remember that day just a few years ago when someone made up the word "Latinx" out of thin air.
Small businesses are concerned about profit margins amid inflationary pressures, as well as issues such as crime rates and stricter tax enforcement, according to a poll released by Job Creators Network.
Is this the next pandemic? Health experts claim that a sudden, unexpected illness is expected to cause many American employees to stay home, some for a week or more, on May 12, 2023.
MSNBC anchor Chuck Todd appeared to have a difficult time accepting Vice President Kamala Harris’ assertion that the U.S.-Mexico border was secure.
North Carolina’s unemployment rate increased to 3.5% in August after remaining flat at 3.4% for four consecutive months prior, according to the latest release from the North Carolina Department of Commerce.
Pope Francis asked for prayers on Sunday ahead of a trip this week to the former Soviet republic of Kazakhstan for an international meeting with religious leaders.


After being removed from a scenic island off the coast of Massachusetts and placed on a bus headed for a nearby military base, immigrant José Valdez has reportedly begun suspecting that the Martha's Vineyard resident who promised to be his pen pal was not actually being serious.
Retired Gen. Frank McKenzie warned on Sunday that the U.S. has limited intelligence capacity in Afghanistan 21 years after the terrorist attacks of 9/11.
N.C. lawmakers accuse redistricting plaintiffs of trying to "disestablish" the General Assembly's authority to draw state election maps.
On the 21st anniversary of the 9/11 terrorist attacks on America, Sen. Mark Warner (D-VA) invoked the January 6th Capitol riot.
Everyone is either a member of a family, or has close association with a family that is forced to shelter a pathetic character, ignobly tolerated; a family member that exists only to be a monumental embarrassment on their best days; their worst days are horror stories.
Superstar Chris Pratt sent a message Sunday to all those people who died in the terrorist attacks on September 11, 2001 — who “risked their lives for us and our country.”
Prison reform advocates are celebrating the NYPD's unprecedented move to put dangerous criminals back out on the street as quickly as possible with the unveiling of the new giant slide.
A new poll indicates that Georgia GOP candidate Herschel Walker is gaining speed in the Peach Tree State’s senate race against incumbent Senator Raphael Warnock (D-GA).


Back to Top