U.S. consumer price increases eased in August compared to a year ago, the government said Tuesday, but the drop was modest and may not be noticed much by financially squeezed American households.
The inflation rate was up at an annualized 8.3% rate in August, the Bureau of Labor Statistics reported. The figure was down from the 8.5% mark recorded in July and the 9.1% inflation rate in June, which was the biggest increase in four decades.
Even as U.S. motorists have gladly watched gasoline prices fall sharply in recent weeks — down 10.6% from their peak — costs for food and apartment rentals have continued to increase.
Overall, as a result, the government said that consumer prices were up one-tenth of a percent in August, compared to July.
Food prices were up 0.8 percent in the past month, while costs for housing, medical care, new cars and household furnishings all increased in August compared to July.
Stock investors in the United States remain worried about inflation, with major indexes falling more than 2% at the opening of trading on Tuesday, an hour after the release of the inflation report.
President Joe Biden adopted a more optimistic view, saying, "Overall, prices have been essentially flat in our country these last two months. That is welcome news for American families, with more work still to do.
"Gas prices are down an average of $1.30 a gallon since the beginning of the summer," he said. "This month, we saw some price increases slow from the month before at the grocery store. And real wages went up again for a second month in a row, giving hard-working families a little breathing room."
Bankrate.com senior economic analyst Mark Hamrick said in a statement, "The prices for necessities continue to fuel this fire, including shelter, food, and medical care. The substantial decline in gasoline prices is noteworthy but doesn't address the overall problem with inflation.
"The report notes that the food index has jumped 11.4% over the past year, marking the biggest 12-month increase since May 1979," Hamrick said.
The Federal Reserve, the country's central bank, has already boosted its benchmark interest rate four times this year and signaled that it plans to impose another rate increase as policy makers meet again next week and could add more later in the year.
The rate increases have rippled through the U.S. economy, boosting borrowing costs for businesses and consumers, with the Fed hoping the higher rates will dampen consumer demand and thus curb inflation.
Fed chairman Jerome Powell said earlier this year, "Inflation is much too high and we understand the hardship it is causing. We're moving expeditiously to bring it back down."
Even with high inflation, the U.S. economy, the world's largest, continues to add hundreds of thousands of new jobs to company payrolls month after month, and the 3.7% national unemployment rate in August is near a 50-year low.
The U.S. has recovered all the jobs lost as the coronavirus pandemic surged into the country in March 2020.