Inflation Report Ahead, What Might It Look Like In The United States (U.S. CPI)?
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Recently, we have been watching prices rise every month. Inflation has also hit the US economy. How this time the change in the price of goods and services from the perspective of the consumer can and what it looked like with the last reading.
Forecast
In August, the Consumer Price Index (CPI) for All Urban Consumers increased 0.1 percent, seasonally adjusted, and rose 8.3 percent over the last 12 months, not seasonally adjusted.
The annual inflation rate in the US eased for a second straight month in August of 2022, the lowest in 4 months, from 8.5% in July but above market forecasts of 8.1%.
Forecasts for September are the same as for August, ie 8.1%. On Wednesday, September 12, we will know the official results. We can expect that also in September food and energy will become more expensive.
Source: investing.com
The data presented above shows a general picture, while the division into selected categories is presented in the table below.
12-month percentage change, Consumer Price Index, selected categories, August 2022, not seasonally adjusted
Source: https://www.bls.gov/cpi/
Source: U.S Bureau Of Labor Statistics
Energy
It may be noted that energy prices in August 2022, compared to the same month last year, increased by 23.8%. It was the highest increase among the categories.
Crude oil and natural gas prices were already high entering 2022 as rebounding global demand for energy commodities occurred faster than supplies have been able to keep up. But on Feb. 24, prices spiked further following Russia’s invasion of Ukraine. Russia is a major producer and exporter of crude oil and natural gas for Europe. Subsequent sanctions against Russia drove energy prices higher as countries looked elsewhere to purchase their crude oil.
In the U.S., crude oil accounts for about 54% of the cost of gasoline at the pump, according to Energy Information Administration data (EIA). The limited supply of this commodity thus drove up the national average for gasoline in the U.S. to over $4/gallon, according to EIA data.
This situation mainly affects European consumers, but also American consumers bear costs such as the costs of distillation and transportation. Moreover, it may affect the results of the economic growth of the American economy.
Food
Compared to August 2021, food prices increased significantly in August this year.
For many of us, going to the grocery store is where we really feel this crushing inflation. We see a big price for our groceries lining up at the checkout and then do some calculations in our heads to determine what other things we can sacrifice financially as we have just been hit by a high food bill.
For lower-income Americans, the situation is particularly worrying. Soaring food prices are regressive and particularly damaging to them, as they spend more of their after-tax income on food compared to higher-income Americans.
In such a situation, they will decide to buy more modest groceries and may not even go to the cinema or not go out to dinner in the city, which may have worse consequences for such people, for example not going to the doctor or not turning on the air conditioning.
The increase in prices not only negatively affects consumers, but also manufacturers and entrepreneurs. Food prices also exacerbate labor shortages and government interventions that discourage work and increase labor costs.
Summary
This is a difficult time for all Americans. The current inflation is acting like a tax on all of us and is damaging our quality of life.
Policy makers at all levels of government should be focused on eliminating the many government interventions that drive up prices, including food prices. Instead of fueling inflation, policymakers must remove the policies that contribute to it.
