WASHINGTON – The US consumer price index rose 0.3% last month, lower than expected, the smallest increase in seven months, and a hopeful sign that the recent surge in inflation may be cooling.
On Tuesday, the US Department of Labor reported that the August inflation was less than the 0.5% July increase and 0.9% June increase. This is the lowest price rise since January when they rose 0.3%.
While the trend of rising prices seemed to be slowing, economists cautioned that there are still underlying reasons. Supply chain chaos is still a problem, particularly for critical components like computer chips. The supply chain is still chaotic, especially for key components like computer chips. This will lead to higher prices.
The price of the past 12 month has risen by 5.3%. This is slightly lower than the 5.4% increase in the previous two months. This is the largest 12-month price rise since 2008.
The core price of core goods rose 0.1% in August, and 4% in the last year. This is a slight improvement on the previous 12-month increases of 4.3% and 4.5%, respectively.
There is some evidence in Tuesday’s report that the surge in COVID-19 cases caused by delta variants may lead to a slowdown in price increases, especially in areas such as travel. August saw a 9.1% drop in airline fares, 2.9% decreases in hotel room rates and 8.5% drops in car rental prices.
The largest US airline warned last week that the spread and severity of the deadly delta variant could delay normal operations. The pandemic caused air travel to drop to levels never seen since the jet age.
Prices for used cars fell 1.5% in August due to insufficient supply. New car prices increased 1.2%. This indicates that automakers are still struggling to get semiconductor supplies.
The market consensus of 0.4% price increases in August was lower than the 0.3% increase.