Tuesday, September 16, 2008
The Labor Department reported consumer prices cooled in August, falling 0.1 percent after an increase of 1.1 percent in June and 0.8 percent in July. This brings the annual rate of inflation down 0.1 percentage points to 5.4 percent.
Gasoline prices fell 4.2 percent in August after rising 10.1 percent in June and 4.1 percent in July. Overall energy costs (including motor fuel and household energy) fell 3.1 percent cent in August, after increases of 6.6 percent in June and 4.0 percent in July.
From year ago levels, gasoline is 35.9 percent more expensive and energy prices overall are 27.6 percent higher.
Food prices, which account for 15 percent of the Consumer Price Index, increased 0.6 percent in August after a 0.9 percent gain in July and are up 5.9 percent on a year-over-year basis.
Food prices will be closely watched in the months ahead to see how they are affected by tumbling energy prices. In many cases, the full impact of rising fuel costs in production and shipping was not passed on to consumers for fear of losing business.
With energy prices still substantially higher than a year ago when crude oil prices began to surge, food prices may see little benefit from lower energy costs.