A consumer shops as she wears a mask at a retail store in Morton Grove, Ill., Wednesday, July 21, 2021.
Nam Y. Huh/AP Photo
The Consumer Price Index climbed 0.3% in August, missing the average economist forecast.
The reading reflects a slowdown from the 0.5% jump in July.
The data suggests nationwide price growth continued to cool as the Delta variant curbed the US recovery.
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Inflation cooled off – again – in August as the wave of Delta cases slowed spending and threatened the broader economic recovery.
The Consumer Price Index – a popular measure of nationwide price growth – gained 0.3% last month, the Bureau of Labor Statistics said Tuesday. That missed the median estimate for a 0.4% jump from economists surveyed by Bloomberg. It also reflected a slowdown from July’s 0.5% increase.
The CPI also rose 5.3% on a year-over-year basis. That matched the average forecast of 5.3% growth.
The aforementioned metric tracks the prices of various goods and services to measure inflation in the US economy. Core CPI, which excludes volatile food and energy prices, gained 0.1% last month, falling short of the 0.3% estimate. That marked the weakest core inflation since February and a slowdown from 0.3% growth in July.
Inflation soared to decade highs through the spring and summer as economic reopening brought a handful of strains. Production bottlenecks left businesses struggling to shore up supply, and the labor shortage hampered hiring efforts. On the other end of the economy, the easing of economic restrictions sparked a spending spree across the country as Americans flocked to reopened businesses. The resulting mismatch between supply and demand drove businesses to raise prices at the fastest rate since 2008.
That sudden surge in price growth has since eased up. The CPI price index’s year-over-year reading was flat through July, and several of the sectors powering stronger inflation cooled off. The recent slowdown in monthly price growth suggests the outlook held by the Biden administration and the Federal Reserve could ring true. Both have said stronger inflation will die down into 2022 as supply chains heal and huge demand fades.
It’s likely the Delta wave of COVID cases also crimped inflation. Measures of consumer spending floundered through late July and August as case counts soared higher and governments reimposed some economic restrictions. Wall Street banks lowered their expectations for economic growth on the spending slowdown, and consumer sentiment plummeted as Americans braced for another virus resurgence.
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Source:: Business Insider