Economic Report: Inflation is set for a big increase, CPI to show. Here’s why.

by | Sep 12, 2023 | Stock Market

Is inflation getting worse? Consumer prices are expected to post the biggest gain in August in more than a year. Here’s how to read the latest consumer-price index.The forecast Consumer prices are expected to jump 0.6% in August — the biggest increase in 14 months — according to economists polled by the Wall Street Journal.

By contrast, the CPI barely rose in each of the past three months. The chief culprit? Higher oil prices. The cost of oil has surged almost 25% since late July. In some parts of the U.S, the cost of gas has even topped $4 a gallon. As a result, the yearly rate of inflation could climb to 3.6% August from 3.2% in July and from a 27-month low of 3% in June. Yet if energy is set aside, inflation is easing in most parts of the economy. And most economists predict it will continue to slow, giving the Federal Reserve the green light to end its latest cycle of interest-rate increases aimed at taming inflation.Core inflation That’s why the so-called core rate of CPI is sure to get more attention. The core rate strips out food and energy to get a better idea of the underlying trend in inflation. Jumpy food and gas prices can often distort U.S. inflation readings in the short run. The core CPI is forecast to rise a smaller 0.2% in August, in l …

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