Consumer prices rise in August as prices surge for used cars

Daniel Fowler
September 13, 2020

The Labor Department reported Friday that the August increase in the consumer price index reflected some moderation following big gains of 0.6% in both June and July as the pace of energy price gains slowed.

On tops of that, apart from the United States used vehicle prices' largest monthly rise since March 1969, other big gains in USA consumer prices had been witnessed in household spending that rose as much as 0.9 per cent last month, remarking its largest monthly rise since the February of 1991, while prices of home appliances alongside furniture and bedding had been met with an intransigent spike amid an inflating work-from-home employees across the world's No. Prices for certain goods have rebounded especially well, reflecting a shift in consumer habits and preferences amid the pandemic, as well as continued business disruptions and adaptations in many industries. Apparel prices rose 0.6%, advancing for a third straight month.

However, the prices of housing, water, electricity, gas, and other fuels fell by 0.42%; communication by 0.02%; miscellaneous goods and services by 1%; and restaurants and hotels by 0.32% in August 2020 compared to the same month of 2019. August's core PCE price index data is scheduled to be released at the end of this month. The median projections in a Bloomberg survey of economists called for a 1.2% year-over-year rise and a 0.3% gain on a monthly basis. A 5.4% surge in the cost of used cars and trucks accounted for more than 40% of the gain in the core index. The US central bank in August rewrote its framework, putting new emphasis on the labor market and less on worries about too-high inflation.

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Consumers paid less for beef as its price dropped 4.4%. Prices for household furnishings and operations rose 0.9%, the largest increase since February 1991, likely due to more people working from home. The prices of furnishings, household equipment, and routine household maintenance also rose by 0.23 per cent. Non-alcoholic beverages registered a price rise of 0.21 per cent.

However, education fell 0.3 per cent, which the Labour Department said was its first decline since the index started in 1993, while personal care fell by the same amount after rising in June and July.

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