• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 7 days The United States produced more crude oil than any nation, at any time.
  • 7 hours Could Someone Give Me Insights on the Future of Renewable Energy?
  • 7 days How Far Have We Really Gotten With Alternative Energy
  • 10 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 10 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
City A.M

City A.M

CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and…

More Info

Premium Content

Rising Gasoline Prices Push August Consumer Price Index Higher

  • The US Consumer Price Index (CPI) increased by 0.6% in August, the largest gain since June 2022, driven primarily by rising gasoline prices.
  • Core CPI, excluding food and energy, went up by 0.3%, with a noted decline in used cars and trucks prices, while rents continue to climb, albeit at a slowing rate.
  • Despite the rising inflation, financial markets largely anticipate that the Federal Reserve will maintain its current interest rate in its upcoming decision.
Gasoline Prices

US consumer prices increased by the most in more than a year in August amid a surge in the cost of gasoline, but a moderate rise in underlying inflation could encourage the Federal Reserve to keep interest rates on hold next Wednesday.

The consumer price index increased by 0.6 percent last month, the largest gain since June 2022, the Labor Department said on Wednesday. The CPI had risen 0.2 percent for two straight months.

Gasoline prices accelerated in August, peaking at $3.984 per gallon in the third week of the month, according to data from the U.S. Energy Information Administration. That compared to $3.676 per gallon during the same period in July.

In the 12-months through August, the CPI jumped 3.7 percent after climbing 3.2 percent in July. While that marked the second straight month of a pick up in annual inflation, year-on-year consumer prices have come down from a peak of 9.1 percent in June 2022. The Fed has a two percent inflation target.

Economists polled by Reuters had forecast the CPI increasing 0.6 percent last month and advancing 3.6 percent year-on-year. The report was published a week before the Fed’s rate decision and followed data this month showing an easing in labor market conditions in August.

Excluding the volatile food and energy components, the CPI increased 0.3 percent amid declining prices for used cars and trucks. The so-called core CPI had increased 0.2 percent for two consecutive months. Though rents continued to increase, the trend is cooling and a further slowdown is expected as more apartment buildings come on the market.

In the 12 months through August, the so-called core CPI increased 4.3 percent. That was the smallest year-on-year rise since September 2021 and followed a 4.7 percent gain in July.

Financial markets overwhelmingly expect the Fed to leave its policy rate unchanged next Wednesday, according to CME Group’s FedWatch tool. Since March 2022, the U.S. central bank has raised its benchmark overnight interest rate by 525 basis points to the current 5.25 percent -5.50 percent range.

But a rate hike in November remains on the table as services inflation, excluding shelter, remains elevated.

Some economists believe inflation risks are tilted to the upside, citing rising insurance costs, especially for motor vehicles. Health insurance costs in the CPI report are expected to rise from October through next spring after the Labor Department’s Bureau of Labor Statistics, which compiles the report, recently announced changes to its methodology for measuring these costs.

A strike in the automobile sector could disrupt supply chains and boost motor vehicle prices if it lasted more than a month, economists said.

United Auto Workers members last month voted overwhelmingly in favor of authorizing a work stoppage at General Motors, Ford Motor and Stellantis, if an agreement over wages and pension plans was not reached before the current four-year contract expires on Sept. 14.


By CityAM


Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • George Doolittle on September 14 2023 said:
    Energy sensitive economies like USA West Coast and the Boston New York Philadelphia Washington DC corridor are far less reliant on gasoline as a deterrent to consumption than ever in living memory at the moment even Florida now/too/as well.

    In the alternative are Texas, New Mexico, North Dakota, Michigan, California (irony), Ohio which actually benefit from these very well bid "fevers" for lack of better term. Huge jump in Nikola today not a surprise by way of specific example. Long $ibm international business machines strong buy

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News