Rent increases by 6.3% in one year as the main cause
Food prices increased by 13.5% in one year
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The US consumer price index (CPI) in August rose 8.3% from August last year as food and rental prices rose despite falling gasoline prices.
According to Market Watch on the 13th (local time), the high CPI is termed a surprise for inflation, compared to the market, and economists predicted that the August CPI would be 0.1% lower than the previous month and only approximately 8.0% on an annual basis.
The main CPI, to which experts have paid the same attention as the main CPI, is considered a particular problem. Excluding energy and food prices, the core CPI has risen by 0.6 percentage points over the past month, an increase of 6.3% annually. That’s more than double the 0.3% Wall Street forecast.
Basic consumer prices include the prices of services such as rent and medical care. Notably, the 6.3% increase in one year is the largest contributor to the main CPI, as rents increased 0.7% in one month. Rent growth is the highest since 1990. The Fed also sees rent increases as the main contributor to inflation.
Even as the housing market shows signs of recession, experts analyze that rents will have the biggest impact on core CPI for now, as rents are unlikely to return to a bearish trend within a short period of time.
Food prices are also an issue. Food prices rose again last month, up 13.5 percent from last year, the biggest increase since 1979.
Here medical costs, which stabilized during the pandemic, are once again rising. Medical expenses have increased by 5.4% in the past year, the largest increase since 1993.
Prices for almost everything but airfares and used cars went up last month.
Inflation in the United States increased at an average annual rate of less than 2% in the decade preceding the pandemic.
As inflation in August, followed by the Fed, exceeded expectations, a 75 basis point hike in the benchmark interest rate is likely to take place at the Federal Open Market Committee (FOMC) meeting next week.
Market experts, who had expected easing of a 50 basis point hike starting in November, even predict that a 75 basis point hike is possible in November if key CPIs such as rent are not determined.
By Kim Jung-ah, staff reporter [email protected]
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