The Bureau of Labor Statistics reported on Tuesday that the Consumer Price Index (CPI) rose by 8.3% in August compared to last year. This represents a 0.1% rise from July.
While inflation has cooled down after prices reached a four-decade high earlier this year, food and energy bills remain highly volatile. Excluding food and energy, prices rose 6.3% compared to last August; a 0.6% increase from July. Such figures exceed expectations of a 6.1% annual increase and a 0.3% monthly rise.
Tuesday’s reported figures came as a surprise to onlookers, particularly since the gasoline index plummeted by 10.6% while energy prices cooled down.
Federal Reserve officials are planning to raise interest rates by 0.75% at their policy meeting on September 20-21 as a means of tackling the rise in consumer prices. According to central bank officials, monetary policy will need to remain strict for the coming months in order to see significant progress being made with the extinguishing of rising inflation.
“While the moderation in monthly inflation is welcome, it will be necessary to see several months of low monthly inflation readings to be confident that inflation is moving back down to 2 percent,” Vice Chair Lael Brainard remarked.