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- The Consumer Price Index rose by 3.7% over the year in August.
- That's above July's year-over-year increase.
- The latest report from the Bureau of Labor Statistics suggests inflation is still too high, given the Fed's 2% target.
Inflation is still a concern as it increased again in August.
The Consumer Price Index or CPI rose by 3.7% year-over-year in August, the Bureau of Labor Statistics reported. That's greater than July's year-over-year increase of 3.2% and exceeds the forecast of a 3.6% increase year over year.
CPI surged 0.6% month over month in August, matching the forecast. That comes after an increase of 0.2% month over month in July.
Wednesday's news release from the Bureau of Labor Statistics said gasoline's index was the biggest contributor for the rise in the month over month change. This index accounted for more than half of the month over month surge, BLS found.
"If recent increases in gasoline and other energy costs are sustained, it could feed through to prices on a broader range of goods and services. Something to watch in the months ahead," Greg McBride, chief financial analyst of Bankrate, said in a statement after the new CPI release.
The index for gas climbed 10.6% month over month, way more than the previous month over month increase of 0.2%. Year over year, this index fell 3.3%, a much smaller magnitude than the decline of 19.9% year over year in July.
"Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month," BLS wrote.
The index for shelter increased 0.3% from July to August after an increase of 0.4%. This index rose 7.3% year over year, cooler than the preceding year over year increases. The index for shelter was also a big contributor for the rise in core CPI, with BLS noting that it accounted "for over 70 percent of the total increase in all items less food and energy."
Meanwhile, the index for used cars and trucks declined by 1.2% month over month and declined by 6.6% year over year.
The new report also shows how much core CPI increased in August, a key inflation measure that excludes food and energy. Core CPI increased by 0.3% month over month, above the forecast of 0.2% and above July's increase of 0.2%.
Year over year, core CPI soared by 4.3%, same as the forecast of 4.3% and below July's increase of 4.7%.
Before this and the previous report for July, inflation had been falling. While the Fed has been fighting inflation with interest rate hikes, there may be more to come as inflation is still above the central bank's target 2%.
"The monthly rate of change in both headline and core CPI measures have moderated nicely in recent months, but some of the usual trouble spots remain — shelter, and costs for motor vehicle insurance, maintenance, and repair," McBride said in a statement before the release. "Further progress will require easing of price pressures on these items without any flareup elsewhere."
The latest CPI report comes before the next Federal Open Market Committee meeting next week.