Economists with both credit union trade associations saw some good news in the CPI numbers.

ARLINGTON, Va.—On a seasonally adjusted basis, overall consumer prices rose 0.3% in August, with the Bureau of Labor Statistics reporting the overall consumer price index (CPI) grew 5.2% over the 12-month period.

Economists with both credit union trade associations saw some good news in the numbers.

NAFCU Chief Economist and Vice President of Research Curt Long noted that this is the "slowest increase in both CPI and Core CPI since February."

Core prices (excluding food and energy costs) rose 0.1% compared to July. Year-over-year core CPI growth was 4%.

"Prices dropped for used vehicles (-1.5%), hotel rates (-3.3%), and airfare (-9.1%) after rapid increase earlier this summer," said Long. "This is the first decline in auto prices since January."

Energy prices rose 1.6% during the month, following a 1.5% rise in June. From a year ago, energy prices were up 23.6%. Additionally, food prices rose 0.7% in July and were up 3.4% compared to this time last year.

"Supply chains are still driving increased costs as material and labor shortages cause ripples across the globe," added Long. "The Fed remains adamant that inflation will cool over time and inflationary pressures will abate as supply bottlenecks ease, but housing costs will be key, as rent is about a third of the basket of goods calculated by the Labor Department. It appears the summer spike in prices has passed, and although inflation will remain above 2% from some time, it won’t warrant a rate hike until 2023.”

CUNA Analysis

Meanwhile, CUNA Senior Economist Dawit Kebede issued said of the numbers, “The good news is that the August inflation report was on target with what was expected. The slight monthly price increase of 0.3% is close to the pre-pandemic average but the annual rate remains high compared to last year.

“On the other hand, there are indications that the strong economic growth we saw in the second quarter is slowing down. We know this because of the decline in the consumer sentiment index amid concerns of the Delta variant and a slower job market.

“The Federal Reserve will probably delay slowing its purchase of Treasury and mortgage-backed securities despite slight indications that the price increase in durable goods is transitory, as illustrated by the reduction in used car prices. This is because we are far from maximum employment.”