(Bloomberg) -- Prices paid by U.S. consumers rose in August by less than forecast, suggesting that some of the upward pressure on inflation is beginning to wane.
The consumer price index increased 0.3% from July, according to Labor Department data released Tuesday. Compared with a year ago, the CPI rose 5.3% . Excluding the volatile food and energy components, so-called core inflation climbed 0.1% from the prior month and 4% from August 2020.
Follow the reaction in real-time here on Bloomberg’s TOPLive blog
Economists in a Bloomberg survey called for a 0.4% increase in the overall CPI from the prior month and a 5.3% gain from a year earlier, based on the median estimates.
Faced with mounting cost pressures as a result of materials shortages, transportation bottlenecks and hiring difficulties, businesses have been boosting prices for consumer goods and services. While price spikes associated with the economy’s reopening are beginning to abate, tenuous supply chains could linger well into 2022 and keep inflation elevated.
A Federal Reserve Bank of New York survey showed Monday that consumers expect inflation at 4% over the next three years, the highest in data back to mid-2013.
The CPI data precede next week’s Federal Open Market Committee meeting, where Fed officials will debate how and when to begin tapering asset purchases. Fed Chair Jerome Powell said last month that the central bank could begin reducing its monthly bond purchases this year, but didn’t give a specific time line.
Parts shortages that have driven up input costs are restraining production. In the last week, Toyota Motor (NYSE: TM ) Corp. and 3M (NYSE: MMM ) Co. both downgraded their outlooks for car output due to semiconductor shortages, while Nestle said it is introducing even bigger price hikes as commodity and transportation costs surge.
Meantime, Hurricane Ida halted operations at refineries and petrochemical plants in the south, adding to pandemic-related supply chain bottlenecks and likely price pressures as well.
©2021 Bloomberg L.P.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.