August inflation breakdown: Where are prices hitting Americans the hardest?


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Inflation rose more than expected in August as the rising cost of food and rent offset a major decline in gasoline prices.

The Labor Department said Tuesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 8.3% in August from a year ago. Prices climbed 0.1% in the one-month period from July.

Those figures were both higher than the 8.1% headline figure and 0.1% monthly decline forecast by Refinitiv economists, a worrisome sign for the Federal Reserve as it seeks to cool price gains and tame consumer demand with an aggressive interest rate hike campaign. Stocks sank on the surprisingly hot report, with the Dow Jones Industrial Average shedding more than 1,000 points on Tuesday afternoon.

So-called core prices, which strip out the more volatile measurements of food and energy, climbed 6.3% from the previous year, above the 6.1% forecast from economists. Core prices also rose more than expected on a monthly basis, jumping 0.6% in August – a bigger increase than in April, May, June and July, and a troubling sign that underlying inflationary pressures in the economy remain strong.


"The August CPI report indicates that inflation is still roaring hot," said Jason Reed, an assistant chair and professor of finance at the University of Notre Dame's Mendoza College of Business. "Economists were hoping for a cool down during August and they saw that with significant declines in the price of gasoline and energy, but food and healthcare prices remained high."

Here's a breakdown of where Americans are seeing prices rise the fastest — and where there has been some reprieve from higher inflation — as they wrestle with sticker shock for the first time in a generation: 


The Consumer Price Index for common household foods including meat, eggs, fish, milk. fruits & vegetables, and coffee increased. (U.S. Bureau of Labor Statistics / Fox News)

Food has been one of the most visceral reminders of red-hot inflation for Americans, with prices climbing 0.8% over the month, according to unadjusted figures. That is the first time in seven months the increase has not been above 0.9%. On an annual basis, food prices have soared 11.4%.

The cost of groceries, meanwhile, climbed 0.7%, putting the 12-month increase at 13.5%, the highest since May 1979. Americans are paying more at the grocery store for a number of items that have climbed considerably in price during the one-month period between July and August.


That includes items like hot dogs (5.3%), potatoes (3.1%), eggs (2.9%), butter (2.7%), ham (2.5%), bread (2.2%) and ice cream (2%). 

"Rising food costs are a growing concern," said Jeffrey Roach, the vice president and chief economist at LPL Financial. "The food index rose 11.4% from a year ago, the largest year-over-year increase since 1979. Inflation pressures are especially hurting lower income households, who spend a greater percentage of income on food."


A “For Rent” sign outside an apartment building in the East Village neighborhood of New York, US, on Tuesday, July 12, 2022. (Gabby Jones/Bloomberg via Getty Images / Getty Images)

In another worrisome trend that will further squeeze U.S. households, shelter costs — which account for roughly one-third of the CPI — sped up again in August, climbing 0.7% from the previous month, compared with a 0.5% increase in July. 

On an annual basis, shelter costs have climbed 6.2%, the fastest since February 1991. 


Rent costs jumped 0.8% over the month and 6.7% on an annual basis. Rising rents are a concerning development because higher housing costs most directly and acutely affect household budgets. Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home, climbed 0.7% in August from the previous month.

"Housing was another major contributor to inflation in August, with the shelter index rising 0.7% month-on-month," said Cailin Birch, global economist at the Economist Intelligence Unit. "We expect rental and mortgage costs to continue to rise in the coming months, partially reflecting rising interest rates." 


The year-over-year Consumer Price Index for energy rose.  (U.S. Bureau of Labor Statistics / Fox News)

There was some real reprieve for U.S. households last month in the form of lower energy prices, which contributed to the decline in headline inflation. The cost of energy fell 6.2% in August from the previous month, though it remains 23.8% higher than just one year ago. Gasoline prices fell a stunning 12.2% in August but remain up 25.6% from last year.

The average price for a gallon of regular gas was $3.70 nationwide on Wednesday, according to AAA. That marks a major drop from the record high of $5.01 set in mid-June, although it's still a big increase from one year ago, when prices sat at $3.17

The drop in energy prices was not broad-based: Electricity prices, for instance, rose 1.1% in the one-month period from July to August and were up 15.8% from a year ago.


A pedestrian walks past a pre-owned car sales lot in Miami, Florida on January 12, 2022. (Photo by CHANDAN KHANNA/AFP via Getty Images / Getty Images)

Unfortunately for Americans who needed to buy a car in July, the price of new vehicles continued to march higher.

The cost of new vehicles is up 10.1% from the prior year, largely because semiconductor shortages continue to delay car manufacturing. On a monthly basis, the price of new vehicles jumped 0.6%, according to the unadjusted Labor Department data.

But used car and truck prices, which have been a major component of the inflation increase, actually fell 0.4% in August from the previous month. The cost of a used car or truck is still about 7.8% higher than it was one year ago.


Travel and transportation

The year-over-year Consumer Price Index for travel increased.  (U.S. Bureau of Labor Statistics / Fox News)

Airline fares declined in August for the third consecutive month, plunging 8.8% in the one-month period from July. Still, airfare costs are up 33.4% over the past year, according to unadjusted data – in part because airlines are passing along the cost of more expensive fuel to consumers.  

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