Inflation stays on the rise, and August was even faster than expected as the consumer price index hits 8.3%. Although gas prices have gone down in recent months, overall prices of goods continue to rise. As the economy faces a recession, consumer price indexes hitting new highs spells bad news for the economy.
Just moments before President Biden signed into law the Biden Inflation Reduction Act, the feds released the devastating numbers contained within the CPI. And Biden celebrated it with a party on the lawns of the White House.
Americans are paying the most they have for groceries since 1979, with groceries raising 0.7% this past month. Americans trying to buy cereal, milk, vegetables, and other common produce paid 13.5% more over this last 12-month period. As the economy attempts to recover from COVID-19, some can’t help but notice that the long-term closures of businesses likely hurt the economy much more than it would’ve otherwise been impacted.
The Labor Department said Tuesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 8.3% in August from a year ago. Prices climbed 0.1% in the one-month period from July.
Those figures were both higher than the 8.1% headline figure and 0.1% monthly decline forecast by Refinitiv economists, a worrisome sign for the Federal Reserve as it seeks to cool price gains and tame consumer demand with an aggressive interest rate hike campaign. Stock futures tanked on the surprisingly hot report, with the Dow Jones Industrial Average down more than 400 points.