CPI Rises .6% in August 2023: CPI, Federal Reserve, Prices, and Credit Cards

New CPI numbers came out so you can read those and sort of gauge where we are in terms of our economic position. Different analyst's will view things in different ways but in general there is an expectation that the Federal Reserve will hold off on interest rate hikes (In this market that may change tomorrow so we should be aware of the general trends.). The Federal Reserve often considers how they are going to approach the market to manage the economy. i.e raise, lower, or hold interest rates to adjust the availability/cost of money. 

Source: History of MI. Paper Money
Read: A Time When Anyone Can Issue

The expectation is that there will not be a rate increase so as to give time to see where the market is heading. That means the Fed Reserve has other things going on and/or are not exactly sure how some fundamental shifts are working (i.e. one possible explanation is new economic assumptions based on an increase in digital influences on the fundamentals of the economy. Things just take time to understand. Even more so if there isn't research to support decisions with large scale ramifications.) 

According to Reuters, "95% of economists, 94 of 97, in the Sept. 7-12 Reuters poll predicted the U.S. central bank would hold the federal funds rate in the current 5.25%-5.50% range next week, in line with market expectations." Fed to leave rates unchanged on Sept. 20; cut unlikely before Q2 2024: Reuters poll. 

Keep in mind The Federal Reserve believes that 2% interest is ideal for stability and growth. So we are significantly higher then that but some of that depends on what we do with other aspects of our economy like technology, wages, etc. In other words, a sense of direction in post Covid emerging economic phenomenon is difficult. You can gain a little more knowledge of why that is the case in. The History and Future of the Federal Reserve’s 2 Percent Target Rate of Inflation (Maybe in the future they will say some other numbers is our new normal.)

Likewise, you can read this article by USA Today. I like it because, with lots of colorful ads, it provides a good overview of CPI and how it impacts our lives and the other things government is doing about inflation. Anway, take a look at it and sort of peak at their ads because they need to pay for the authors and that comes through advertisement. If you really want to help them just click a few because AI is putting pressure on the industry and authors (Thats actually a little scary because we need original and creative content. So one is borrowing to make money without citing and we humans are creating with lower pay. Innovation and human capital is the name of the game going forward so we must make sure creative content is rewarded throughout the system if we want to encourage it. Otherwise, we run into a situation where it isn't lucrative to create because someone else is getting the proceeds. Creativity and capital innovation decline. Come on Humans lets help our own! If it is written by a human and is carbon based lets support it! Ok sorry I thought it was funny. AI Innovations 😂) 

Sorry, I digress....

CPI Live: Inflation rises for second straight month in August on higher gas costs

Source BLS
CPI Inflation Calculator

Up: Food, Shelter, Energy, Medical

Down: Cars, Commodities

12 Month: Fuel down, Gas down, Transportation Service up, Food up, Services Up, Shelter Up

CONSUMER PRICE INDEX - AUGUST 2023 You can read the rest at Bureau of Labor Stats.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.6 percent in August on a seasonally adjusted basis, after increasing 0.2 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.7 percent before seasonal adjustment.

The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase. Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month. The energy index rose 5.6 percent in August as all the major energy component indexes increased. The food index increased 0.2 percent in August, as it did in July. The index for food at home increased 0.2 percent over the month while the index for food away from home rose 0.3 percent in August.

The index for all items less food and energy rose 0.3 percent in August, following a 0.2-percent increase in July. Indexes which increased in August include rent, owners' equivalent rent, motor vehicle insurance, medical care, and personal care. The indexes for lodging away from home, used cars and trucks, and recreation were among those that decreased over the month.

The all items index increased 3.7 percent for the 12 months ending August, a larger increase than the 3.2-percent increase for the 12 months ending in July. The all items less food and energy index rose 4.3 percent over the last 12 months. The energy index decreased 3.6 percent for the 12 months ending August, and the food index increased 4.3 percent over the last year.

A Little Tid Bit on Credit Cards

We spend entirely too much on credit cards, save too little, and invest almost nothing. At least that is the way it is for some people. To get a handle on your credit card debt means finding new patterns of spending.

-Stop spending except on things you need.
-Opt for a debit cards or cash.
-Cut out a few expensive activities and apply to your balance monthly.
-Put together a budget and designate a percentage you can use toward paying your balance.
-Use savings to pay off your balance and save the interest rate.
-Use your credit card for emergencies.
-Sell items you don't need or are cluttering your garage and you don't use to apply to the balance.
-Get a second job.