Higher Prices Of Gasoline Seen Improving US Inflation In August
September 13, 2023
“U.S. consumer prices likely increased by the most in 14 months in August amid a surge in the cost of gasoline, but an expected moderate rise in underlying inflation could encourage the Federal Reserve to keep interest rates on hold next Wednesday.”
– Reuters.
The consumer price report of the Labor Department on Wednesday is set to be published a week before the rate decision of the Fed. It would be following the heels of data this month by showing ease within the labor market conditions in August.
“It’s going to be a mixed picture, with headline inflation picking up due to higher gasoline prices and core inflation remaining contained,”
added Sam Bullard, a senior economist from Wells Fargo, Charlotte, North Carolina.
“The Fed would be encouraged by the continued moderation trend in core inflation, but it’s still too high.”
The consumer price index possibly rose by 0.6% in the previous month as per the economic survey of Reuters. This would be the most significant profit since June 2022 and may follow two direct monthly advances of 0.2%.
“Gasoline prices accelerated in August, peaking at $3.984 per gallon in the third week of the month,”
as per the U.S. Energy Information Administration’s data.
The cost of food was expected to continue to rise at a moderate speed. Within the 12 months through August, the CPI is expected to have leaped 3.6% after reaching 3.2% in July.
The core CPI, including energy and food, is said to have risen 0.2% for the third consecutive month despite the decline in prices for used trucks and cars.
Some economists expect that the inflation risks are bent towards the upside, citing a rise in the cost of insurance, especially motor vehicles.
There is also a chance for the health insurance costs to rise from October.
“Under our new forecast for CPI health insurance, we continue to expect core CPI and especially core services ex. housing inflation to accelerate in the coming months but to slow more quickly next spring,”
as per Ronnie Walker, a Goldman Sachs economist.
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