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Inflation Slows In August But Remains Near Decade High

(Photo by Justin Sullivan/Getty Images)

Michael Ginsberg General Assignment Reporter
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The Consumer Price Index (CPI) increased 0.3 percentage points in August, bringing the key inflation metric’s twelve-month total to 5.3%, the Bureau of Labor Statistics (BLS) announced Tuesday.

The 5.3% 12-month increase is down from June and July’s 5.4% but is still among the highest the U.S. has seen since 2008. The monthly increase matched the lowest since January 2021. A 2.8% increase in gasoline costs and a 2% overall increase in energy prices were the largest drivers of the CPI increase, according to BLS data. Transportation costs declined for the second straight month.

President Joe Biden and leading Democrats have attempted to push back on inflation fears as they promote their $3.5 trillion reconciliation package.

“Jobs are up and monthly price increases have come down,” Biden said in August. “Economic growth is up, the fastest in 40 years, and unemployment is coming down. So I would argue that the Biden economic plan is working.”

The president also claimed in July that his spending packages would reduce inflation, because people would be “reinvesting that money back in all the things we’re talking about, driving down prices, not raising prices.”

Press Secretary Jen Psaki claimed in July that an inflation spike would be “temporary,” shortly after BLS reported that consumer costs increased 0.9 percentage points in June. That increase was nearly double the estimate of administration economists. (RELATED: The Numbers Are In, Biden’s Inflation Is Not Going Away)

Economists generally agree that increased government spending can drive inflation, leaving some members of Congress skittish about the reconciliation total. Democratic West Virginia Sen. Joe Manchin has repeatedly cited inflation as a key factor in his opposition to the $3.5 trillion total.

“We know it’s running rampant right now, I can tell you in West Virginia inflation is running rampant,” he said Sunday.

Democrats “are all vulnerable if they vote for this $3.5 trillion that is going to do nothing more than continue to fuel this runaway inflation,” Republican Minnesota Rep. Tom Emmer told the Wall Street Journal on Monday.