Inflation continued to level off last month with the rising cost of rent providing the most pain for consumers. The Bureau of Labor Statistics reports the August Consumer Price Index (CPI) rose 0.2%. Over the last 12 months, the nation’s inflation rate is 2.5%.
The cost of shelter was the biggest driver of inflation last month, rising 0.5%. Breaking down that category further, the cost of rent rose 0.4% from July to August and was up 5% in the last 12 months.
Homeowners got hit even harder. “Owners equivalent rent of residence” rose 0.5% in August and was up 5.4% year-over-year.
For the first time in 2024, grocery prices were flat, with no increase. “Food consumed at home,” the category for groceries, saw no increase during the month and is up less than 1% year-over-year. Prices of cereals, fruits and vegetables and beverages all declined last month.
Restaurant menu prices, however, continue to rise. “Food consumed away from home” rose 0.3% during the month and was up 4% over the last 12 months.
Energy provided some relief
Consumers also paid less for energy last month. The cost of gasoline fell 0.6% in August and is down 10.3% year-over-year. Even electric bills were sharply lower last month, falling 0.7%. Natural gas fell even more – 1.7%.
New and used vehicles are becoming more affordable. The cost of new cars didn’t rise in August and is down 1.2% in the last 12 months. The cost of used vehicles fell 1% in August and is down more than 10% over the last 12 months.
It was the last inflation report before the Federal Reserve meets this month. The data is likely to reinforce the likelihood that policymakers will cut interest rates for the first time in four years.