Lower-Than-Projected Inflation Figures Inspire Hope For Recovery

While consumers were hit with price increases in August, inflation fell below expectations and offered hope for the ongoing economic recovery.

Inflation reached 5.3% over the last 12 months and 0.3% from July. Economists were anticipating a 5.4% annual increase and 0.4% rise for the month, according to a Dow Jones survey, as reported by CNBC.

While inflation was 0.3% for the month, that figure falls to 0.1% when energy and food are removed from the equation. For the last 12 months, energy prices have risen 25%, and food prices have increased 3.7%.

Gasoline prices saw a robust rise of 2.8%, with energy increasing 2% in total for the month. Food costs grew 0.4%, with both prices for food at home and food away from home seeing increases of 0.4%.

Major food inflation was seen in nonalcoholic beverages, up 1%, meats, poultry, fish, and eggs, up 0.7%, beef, up 1.7%, and other food at home up 0.6%. Fruits and vegetables were up 0.2%, after a decline in July. Dairy product prices fell 1%.

For the last 12 months, meats, poultry, fish, and egg prices have increased a total of 8%, while beef prices are up 12.2%.

Inflation on household furnishings and operations was 1.3%, and shelter prices have jumped 0.2% for August.

Also seeing price increases during the month was new vehicles (1.2%), recreation (0.5%), and medical care (0.2%).

A decline in prices did occur in August in consumer airline fares, used cars and trucks and motor vehicle insurance.