#Inflation surges as prices spike, settling at high pace

Inflation continued to surge in August, but appeared to settle at nearly the fastest pace in almost 13 years as the economy continues to emerge from the pandemic, the feds said Tuesday.

The Labor Department’s Consumer Price Index, which measures a basket of goods and services as well as energy and food costs, jumped 5.3 percent in August from a year earlier.

That’s down from July’s 5.4 percent year-over-year rise in prices, which exactly matched June’s increase, the biggest 12-month rise since August 2008, just before the financial crisis sent the US into the worst recession it had seen since the Great Depression.

Consumer prices rose 0.3 percent from July, the Labor Department said.

Economists surveyed by Dow Jones expected a 5.4 percent year-over-year spike in August and monthly increase of 0.4 percent.

The core consumer price index, which excludes volatile food and energy costs, rose 4 percent from a year ago, lower than the 4.3 percent year-over-year jump that the index saw in July.

That measure of inflation has eased a bit since it spiked 4.5 percent in June, marking the fastest acceleration of prices it tracks since 1991.

Much of the price increases this summer have been from sectors that were hit particularly hard by the pandemic and have since snapped back to high demand, such as used car prices, airfares and fuel costs.

Volatility in prices of those goods have been central to the Federal Reserve’s argument that the recent flare-up in inflation is temporary and not a reason to taper the government’s bond-buying program that’s been a boon to the stock market.

But as Fed officials urge patience, corporate executives have been warning that they’re going to have to hike prices through the remainder of the year as they try to eke out a profit amid spiking shipping and labor costs.

Executives of major toymakers, retailers, grocery chains and consumer-goods conglomerates have all warned of surging prices.

And when it comes to meat, a sectors that has driven price increases in American grocery stores, the Biden administration has blamed major processors, accusing them of “pandemic profiteering.”