Rent rises 6.3% in one year as the biggest reason
Food prices surged by 13.5% in one year
The US Consumer Price Index (CPI) in August rose 8.3% from August last year as food and rental prices rose despite falling gasoline prices.
According to Market Watch on the 13th (local time), the high CPI is called an inflation surprise, compared to market and economists expected that the CPI for August will be 0.1% lower than the previous month and only about 8.0% on an annualized basis.
The core CPI, which experts paid as much attention to as the headline CPI, is considered a particular problem. Excluding energy and food prices, the core CPI rose 0.6 percentage points over the past month, up 6.3 percent annually. That’s more than double the 0.3% Wall Street had expected.
Core consumer prices include service prices such as rent and medical care. In particular, the 6.3% increase in one year is the biggest contributor to the core CPI, as rents rose 0.7% in one month. Rent growth is the highest since 1990. The Fed also sees rising rents as the main culprit for inflation.
Even if the real estate market shows signs of recession, experts analyze that rents will have the greatest impact on the core CPI for the time being, as rents are unlikely to return to a downtrend within a short period of time.
Food prices are also an issue. Food prices surged again last month, up 13.5% over the past year, the biggest increase since 1979.
Here, medical costs, which have stabilized during the pandemic, are rising again. Medical expenses increased by 5.4% over the past year, the largest increase since 1993.
Prices for almost everything except airline fares and used cars rose last month.
Inflation in the United States has been rising at an average annual rate of less than 2% for the decade before the pandemic.
As inflation in August, which the Fed has been watching, surpassed expectations, a 75 basis point hike in the benchmark interest rate is likely to be held at the FOMC (Federal Open Market Committee) meeting next week.
Market experts, who have expected easing by a 50bp increase from November, even predict that a 75bp increase is possible in November if key CPIs such as rent are not determined.
By Kim Jung-ah, staff reporter [email protected]