In August 2023, the Consumer Price Index for All Urban Consumers (CPI-U) in the United States increased by 0.6 percent, following a 0.2 percent increase in July. Over the past year, the overall price index rose by 3.7 percent without seasonal adjustment.
The primary driver of the monthly increase was the gasoline index, accounting for more than half of the total rise. Additionally, the shelter index continued to increase for the 40th consecutive month, contributing to the August uptick. The energy index saw a substantial 5.6 percent rise in August, with all major energy components increasing. The food index increased by 0.2 percent, mirroring July's increase. Specifically, the food at home index rose by 0.2 percent, while the food away from home index increased by 0.3 percent in August.
Excluding food and energy, the index for all other items increased by 0.3 percent in August, up from a 0.2 percent increase in July. Notable increases were observed in the indexes for rent, owners' equivalent rent, motor vehicle insurance, medical care, and personal care. On the other hand, indexes for lodging away from home, used cars and trucks, and recreation decreased during the same month.
Over the past 12 months ending in August, the all items index increased by 3.7 percent, showing a larger rise compared to the 3.2 percent increase for the 12 months ending in July. The index for all items excluding food and energy rose by 4.3 percent over the last year. In contrast, the energy index decreased by 3.6 percent for the 12 months ending in August, while the food index increased by 4.3 percent over the same period. This analysis reflects the recent trends in consumer prices.
With the next Fed meeting just around the corner, the decision to raise rates or keep them steady will be in the crosshair. The feds tightrope, at this given time, has proven to bring down inflation, however, the overall impact is still undetermined. There is a high likelihood that the Fed keeps rates where they are or raises 25 basis points. It will be interesting as to its direction and the overall impact.