U.S. Inflation Trends - August 2024

Current Inflation Rates

As of June 2024, the annual inflation rate in the United States decreased to 3.0%, down from 3.3% in May 2024. This marks a continuation of the downward trend from earlier in the year. The monthly inflation rate for June was -0.1%, indicating a slight decrease in overall prices from the previous month. (BLS.gov)

Breakdown by Category

• Food: The annual inflation rate for food was 2.2%. Food at home rose by 1.1%, while food away from home increased by 4.1%.
• Energy: Energy prices increased by 1.0% over the past year, with significant fluctuations within the category. Gasoline prices fell by 2.5%, while electricity prices rose by 4.4%.
• Shelter: Shelter costs, a substantial component of the Consumer Price Index (CPI), increased by 5.2% annually.
• Transportation Services: This category saw a notable increase of 9.4%, driven by higher motor vehicle insurance costs (up 19.5%) and motor vehicle maintenance and repair costs (up 6.0%).

Source: (BLS.gov)​

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Core Inflation

The core inflation rate rose 3.3% over the past year, excluding food and energy. This is the smallest 12-month increase in core inflation since April 2021, indicating that underlying inflation pressures might be easing​ (BLS.gov)​ (Inflation Calculator).

Federal Reserve Response

Given the recent trends in inflation, the Federal Reserve is considering its options for future monetary policy. The slight cooling of inflation, rising unemployment, and slower job growth may prompt the Fed to consider rate cuts later in the year to stimulate economic activity and support the labor market​ (BLS.gov)​ (YCharts).

Outlook

While inflation has moderated from its peaks in 2022 and early 2023, it remains above the Federal Reserve's target of 2%. The economic outlook for the remainder of 2024 will depend heavily on the Fed's actions, ongoing geopolitical tensions, and other macroeconomic factors​ (Trading Economics).

These trends reflect a complex economic environment in which inflation is easing but still poses challenges for policymakers and consumers alike. For more detailed updates and specific data releases, refer to the U.S. Bureau of Labor Statistics and other economic resources.

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