Pricing data released Friday by the Bureau of Economic Analysis indicates inflation rose more than expected in August, dealing Americans even higher costs for everyday essential purchases.
The report’s findings on Personal Consumption Expenditure (PCE) that excludes food and energy is a key marker of overall inflation. It rose by 0.6% over the previous month, a bigger jump than had been predicted by Dow Jones.
Median #PCE #inflation was 0.7% from July to August, putting the year-over-year measure at 5.8% and continuing to signal an elevated trend in underlying inflation. See more: https://t.co/cXCwVSLCTy pic.twitter.com/sXlgWtQ2EI
— ClevelandFed (@ClevelandFed) September 30, 2022
The PCE price index for August 2022 increased 6.2% above the August 2021 index. Over that 12-month period, food prices went up 12.4% and energy prices soared by 24.7%.
Food prices have gone up faster than other consumer items, meaning groceries are taking up a larger share of the average American family’s budget. The 12.4% increase in food prices is the largest over any 12-month period since February 1979. Food went up by 0.8% since July, down slightly from the 1.2% increase that occurred that month since June.
Food prices are predicted to continue to spike at around 11% in 2022, which will be the highest number for an annual period since 1974.
The food categories that have seen the largest price increases over the last year include dairy, eggs, cereals, baked goods, and vegetables.
Eggs have historically seen annual price increases of around 3.2%. This year the total inflation for egg prices is expected to be more than 25%.
Cereals and baked goods are set to see 13.5% inflation this year, compared to the historical average of around 2%.
Polling has shown that 63% of American families with children at home have had to change their eating habits due to rising prices, compared to only 31% who have been able to purchase food as usual.
The August numbers benefited somewhat from lower gas prices. However, recent increases in fuel prices will likely have a negative impact on the September data. The average price of a gallon of regular gas nationwide on Friday morning was $3.80, according to AAA. That compares to the average a week prior of $3.69.
The Dow Jones Industrial Average stood at around 28,700 on Friday afternoon, down over 9.25% for the month of September. The S&P 500 lost around 9.6% in September, and the tech-heavy Nasdaq Composite lost over 10.25% for the month.