Inflation increased 0.3% in August

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​Gasoline and food costs led the increase

The cost of living rose last month but at a slower rate than many economists expected. The Labor Department’s Consumer Price Index (CPI) rose 0.3% in August after a 0.5% increase in July.

The prices consumers paid for gasoline, household furnishings and operations, food, and shelter all showed increases last month, with energy leading the way. The energy index increased 2%, mainly due to a 2.8% increase in the gasoline index. 

The cost of food rose 0.4%, with the cost of food at the supermarket and at restaurants both increasing by that amount.

Inflation has increased 5.3% over the last 12 months, leading to widespread price increases. Consumers are also seeing inflation when the price doesn’t go up but their money buys less. Brent of Sparks, Nevada, told ConsumerAffairs he noticed it on a recent trip to Taco Bell.

“My experience today was good but the crunch wrap was 3" in diameter with the same $3.29 price,” Brent wrote in a ConsumerAffairs review. “The crunch wrap used to be 5" in diameter.”

Fred of Jensen Beach, Florida, tells us he keeps a close watch on his monthly expenses. In a review of American Home Shield, Fred said he was satisfied with the service but noted it’s getting more expensive.

“The price went up, but inflation is going up,” Fred wrote. “I hope it doesn't go up every year.”

Food and energy increased the most

The CPI with the costs of food and energy removed rose just 0.1% in August, the smallest increase since February. New cars and trucks, medical care, and recreation were all more expensive last month. The cost of airline fares, used cars and trucks, and motor vehicle insurance all went down during the month. 

For the month of August, consumers’ incomes kept up with the cost of living. The Labor Department reports real average hourly earnings for all employees increased 0.4% from July to August on a seasonally adjusted basis.

But on a year-over-year basis, real average hourly earnings declined 0.9% from August 2020, mostly due to rising inflation.

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