US consumer prices slow in August as inflation pressures ease

US consumer prices slow in August as inflation pressures ease

WASHINGTON: US consumer prices slowed in August as some of the inflation pressures caused by the havoc of the COVID-19 pandemic showed signs of easing, according to government data released yesterday. Spiking prices for gasoline and food, including beef, remain a political vulnerability for President Joe Biden. But with other prices starting to pull back, the Federal Reserve can take comfort heading into next week’s policy meeting that it will not need to rush to tighten monetary policy.

The consumer price index (CPI) rose just 0.3 percent compared to July, while the annual rate eased to 5.3 percent, the Labor Department reported. Rising gasoline prices remained a key driver of inflation last month, but excluding volatile food and energy prices, “core” CPI rose just 0.1 percent — its smallest increase since February, the report said.

And over the past 12 months, core CPI rose four percent, three-tenths slower than the yearly jump in July. The gains in the month were slower than economists had expected, and the easing of price pressures supports the central bank’s argument that much of the recent inflation spike is due to temporary factors that will fade as the world’s largest economy rights itself following the coronavirus shock.