Dean Baker Economy

Price Increases Persist Despite Supply Chain Progress

The overall Consumer Price Index rose 0.1 percent in August, core was up 0.6 percent; up 8.3 percent and 6.3 percent year-over-year, respectively.
Interior view of a supermarket showing aisles of shelves stocked with processed food items. Original: lyzadangerDerivative work: Diliff, CC BY-SA 2.0, via Wikimedia Commons

By Dean Baker / Beat the Press/CEPR

The overall Consumer Price Index rose 0.1 percent in August, core was up 0.6 percent; up 8.3 percent and 6.3 percent year-over-year, respectively. Overall, the picture shows inflation persisting in a wide variety of areas where it seems that supply chain issues are being overcome. This is not a good story.

Food at home prices went up 0.7 percent in August, 13.5 percent year-over-year. Beef, chicken, and milk were up 0.8 percent, 0.5 percent, and 0.2 percent, respectively. These rises are somewhat surprising since price indexes had shown declines.

Car prices are still rising sharply: new vehicles up 0.8 percent in August, 10.1 percent year-over-year, added 0.03 percentage points to the month’s inflation.

The car and truck rental index was down 0.5 percent in August, 6.2 percent year-over-year. This implies that rental agencies have rebuilt fleets and more cars are available for households. The index is still up 39.9 percent from its pre-pandemic level.

Car insurance went up 1.3 percent in August, 8.7 percent year-over-year.

The health insurance index (profits and expenses, not premiums) went up 2.4 percent in August, up 24.3 percent year-over-year.

Car and health insurance together added 0.05 percentage points to the month’s inflation.

Prescription drug prices were up 0.4 percent in August, 3.2 percent year-over-year.

Both rental indexes rose 0.7 percent in August: rent proper up 6.7 percent year-over-year, owners’ equivalent rent up 6.3 percent. The divergence in rental inflation continues with expensive cities seeing smaller rises: San Francisco, New York City, and DC were up 1.9 percent, 2.9 percent, and 3.1 percent year-over-year, respectively. Detroit was up 6.7 percent, Atlanta 13.5 percent, and Phoenix 21.4 percent.

College tuition rose 0.5 percent in August, up 2.8 percent year-over-year.

Apparel prices were up 0.2 percent in August, 5.1 percent year-over-year.

Appliance prices fell 1.2 percent after dropping 0.6 percent in July, but are still up 3.0 percent year-over-year. Supply chain issues are being overcome.

Dean Baker
Dean Baker

Dean Baker co-founded CEPR in 1999. His areas of research include housing and macroeconomics, intellectual property, Social Security, Medicare and European labor markets. He is the author of several books, including Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. His blog, “Beat the Press,” provides commentary on economic reporting. He received his B.A. from Swarthmore College and his Ph.D. in Economics from the University of Michigan.

Dean previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He has also worked as a consultant for the World Bank, the Joint Economic Committee of the U.S. Congress, and the OECD’s Trade Union Advisory Council. He was the author of the weekly online commentary on economic reporting, the Economic Reporting Review (ERR), from 1996–2006.


  1. Supply chain progress?

    Just went grocery shopping and the store was just as visibly low of products as it was during the peak of the corona crisis….except for toilet paper….they had that in plenty.

    Less product and higher prices is all I see.

  2. Forget about Econ 101 supply and demand. They no longer apply to markets, especially international markets. Both are being manipulated by Wall Street, The City of London and Brussels. What we are experiencing now is the food bubble of 2008 on steroids. Grain inflation is blamed on Putin. Look at a map of Ukraine including roads and rails. Grain can and is shipped from Ukraine the same way that the refugees fled to Poland and Hungary. Road and rail is how the grain of the Midwest reaches ports for export.

    1. From 1.5 million tones of grains were exported from Ukraine by sea almost none of that to Africa as promised, almost all of that went to EU to pay for weapons and coupons on sovereign euro debt debt effectively is in default.

  3. In inflationary environment so called “empty shelves” effect is very common even despite record production as it was in Soviet Union ofter collapse. The mechanism of that is simple. Producers limit delivery of goods at fixed contract prices negotiated in the past time period holding them longer for next round of contract price hikes.

    Managers of retail stores often refuse to order of goods priced outside of local customers income level as they do not want products to stay on shelves and eat up their monthly bonuses granted for swift sales. They try to source goods more cheaply. The results is that cheaper products are bought quickly by customers who hoard them, buying more than they need in anticipation of future price hikes.

    This is typical monetary inflation of fiat money backed by nothing that would reference value of money.

    During Covid hysteria they bailed out banks, corporations as well as tens of millions of workers while they were laid off and produced nothing, They printed money that amounted to 30% of all mainstream market value, they suspended evictions for non payment of rent and utilities.

    That alone was huge boosts of people’s purchasing power while in the same time production and imports collapsed, It was this excess money and greed of corporations that resulted with unprecedented inflation that in reality is not rem but at least 30% for basic goods. Now FED wants us fired from jobs and starve to lower demand and hence curb prices. Despite all that Real wages are in collapse for over a year now despite modest salary hikes.

    It it a sign of de-dollarization of global trade.

    Currently dollar seems to get stronger but this is dictated not by global trade that is dumping dollar from transactions but investment flows or rather repatriation of dollars back to US amid higher US interest rates from western vassal states. They just want to park money in US in cash deposits or longer term US bonds.

    1. Inflation and supply shortages are a common strategy of the 1% to impoverish and control the 99%. It is not so much about greed as it is about control. The day before the 1973 coup in Chile the shelves were empty. The day after the coup the shelves were full. The 1% who control the manufacturing, transportation and importation do not like even the idea of socialism and do whatever they can to kill it in the womb. Witness the situation in Venezuela and the support among the banksters for Guaido and the theft of gold by the Bank of England. The 1% do not play fair. They hire the cleverest to give the 99% who have been indoctrinated in supply and demand economics a plausible explanation for their misery. As Gore Vidal explained the rulers do not need to conspire. They think alike. And as Vonnegut says; “And so it goes.”

  4. these measures do not affect the affluent. inflation is not relevant if income is adjusted to price increases—many nations impose wage/price controls—Nixon in USA. american sanctions hysteria is the main but not the only driver of destabilized anglo/NATO economies—political/military/resource conflicts also Poland vs germany/czechia, UK vs France, Greece vs turkey, Hungary vs Brussels, Serbia vs Kosovo/USA…also there increasing internal divisions in EU nations—France Czechia, Poland, Germany Netherlands, Italy France Sweden Bulgaria…anglo EU nations excepting Hungary Serbia now accept and reward incompetent bureaucracies—and leadership: effective leadership would offend

  5. as prices of staples increase the price of vampire flesh decreases. soon it will be within reach of the masses.

  6. it would be interesting to compare nations — balance of trade, inter dependence, debt self sufficiency as to energy manufacturing agriculture…some nations self sufficient re agriculture some not…USA largely self sufficient. US exports some corn soy rice probably poultry. Is inflation due to increased production transportation costs a general trend, energy uneven govt subsidies? vertical/horizontal monopoly? some combination? some point to problems with drought in Europe or Africa—low crop yields…a good analysis would be great id SP can find

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