Gasoline prices are highly visible indicators of inflation, so more pain at the pump could also weigh on US consumers’ moods.īut economists don’t expect volatile energy prices to prevent inflation’s slowdown in the months ahead. The national average for regular gasoline stood at $3.85 a gallon on Wednesday, according to AAA, the highest level in 10 months. A deadly flood in Libya this week disrupted oil exports, which will push up prices at the pump. Global oil prices have risen recently as OPEC+ nations cut production and demand soared. That’s why I remain laser-focused on cutting energy costs, including by investing in clean energy to bolster our energy security.” President Joe Biden acknowledged the spike in gasoline prices, saying in a statement Wednesday: “Overall inflation has also fallen substantially over the last year, but I know last month’s increase in gas prices put a strain on family budgets. ![]() Rising shelter costs continued to feed into inflation. The overall energy index, which includes gasoline, advanced 5.6% in August from July. The CPI’s gasoline index jumped 10.6% in August from the prior month, up sharply from the 0.2% gain in July. Gas prices were the largest contributor to the CPI’s acceleration in August, accounting for more than half of the increase. US stocks were slightly higher after the August CPI release, with the Dow up 0.1%, the S&P 500 0.2% higher and the Nasdaq Composite gaining 0.4%. Wednesday’s inflation report likely keeps the Fed on track for a pause in rate hikes next week when central bank officials meet to deliberate monetary policy. ![]() Fed officials pay closer attention to core inflation. Monthly core inflation rose by 0.3% in August, picking up significantly for the first time since February. However, core inflation slowed to 4.3% from 4.7% for the 12 months ending in August, its slowest pace since September 2021, and an indication that the Federal Reserve’s 11 rate hikes are working their way through the economy. On a month-to-month basis, prices rose 0.6% in August, compared with a 0.2% gain in July. That’s slightly hotter than the 3.6% annual rate economists were expecting, according to Refinitiv. ![]() The Consumer Price Index, a closely watched inflation gauge, rose 3.7% in August from a year earlier, up from July’s 3.2% rise. However, core inflation, which strips out volatile food and energy prices, continued to slow, according to data from the Bureau of Labor Statistics released Wednesday. US inflation accelerated in August for the second-straight month, pushed up by rising gas prices.
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