The August 2023 Consumer Price Index
SEPTEMBER 14, 2023 Headline Consumer Price Index (CPI) inflation was 0.6 percent in August and 3.7 percent over the past year. Both of these rates were a step up from recent inflation reports, and the main factor behind the jump was the August increase in the price of retail gasoline. This price went up 10.6 percent over the month, and gasoline contributed 34 basis points of the overall monthly CPI, or a bit more than half of the 0.6 percent rate (over the past year, the gasoline price is down 3.3 percent). In this blog, we take a brief look at the role of the gasoline price in inflation and how it relates to the pressing question of whether inflationary pressures are reliably easing. The first point to note about the gasoline price is that it is highly volatile. The standard deviation of monthly changes in gasoline prices was 5.7 percentage points from 2000 to 2019. For the overall CPI without energy, the standard deviation was 0.1 percentage point over this period. Another way ...