Washington D.C — Today, the Bureau of Labor Statistics (BLS) released their August inflation report, showing that prices continue to spike upward, thanks in large part, to the war in Iran that congressional Republicans voted for. This war has further pushed up the price of gas and diesel, and these higher costs coupled with cost-raising tariffs and cuts to health care and SNAP are further squeezing millions of working families financially.
Under President Trump and Republicans in Congress, working families have paid over $3,800 more over the past year. This latest inflation report confirms that Americans will continue to face even higher prices over the next several months.
CNN: Inflation heated up last month, boosting the case for a Fed rate hike
Key Points:
- Consumer prices rose at a 3.4% annual rate last month, the same pace as July, according to the latest Consumer Price Index from the Bureau of Labor Statistics.
- Inflation has accelerated since the war with Iran began, and central bankers are watching to determine whether price pressures are spreading through the economy. Fed officials are set to meet next week to decide the next move on interest rates.
- On a monthly basis, prices rose 0.4%, an acceleration from July’s 0.1% rate. Gasoline prices, up 3.9%, accounted for a third of the monthly price increase.
- The most worrisome aspect of August’s inflation report is likely the evidence that inflation has spread beyond the pump. When stripping out food and energy costs, so-called core inflation rose 2.4% in the 12 months ending in August, down from 2.5% in July. On a monthly basis, core rose 0.3%.
- The prospect of higher inflation is also weighing on Americans’ attitudes toward the economy.
- The University of Michigan’s consumer sentiment survey showed a sharp 7.5% drop early this month, marking the second-lowest reading recorded since the inception of the gauge more than 70 years ago.
- Sentiment throughout this year has languished at unusually low levels, below anything seen during the Great Recession, 9/11 and foreign wars.
- “With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come,” Joanne Hsu, the surveys director, said Friday in a release.
- Oil prices are continuing to climb, with diesel prices hitting a record $6 a gallon Friday, and the war with Iran shows little sign of ending anytime soon.
- “The breadth of the price pressures makes the report especially difficult to dismiss. This is not simply an energy story; underlying inflation remains elevated across a wide range of categories,” Olu Sonola, head of US economics at Fitch Ratings, said in a note on Friday.
- Some of the largest price increases in the August CPI report stemmed from tech. Computer software and accessory prices rose 25.4% for the 12 months ended in August, the largest annual price increase recorded. Computers and smart home assistants cost 8.4% compared to a year ago.
- The rising cost of eldercare and childcare is tied to shortages of immigrant workers, who make up a large part of the so-called “care economy,” said Diane Swonk, chief economist at KPMG Economics.
To learn more about the campaign, visit UnrigOurEconomy.com or contact press@unrigoureconomy.com
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About Unrig Our Economy
Unrig Our Economy is a national campaign to fix the rules of our economy to make it work for working people. We know that when the middle class does well, all of us do well — which is why we’re fighting on behalf of working Americans and holding corporations, their wealthy executives, and the politicians who enable them accountable.