Inflation cooled even further in August, reaching a new three-year low. After posting a 2.9% annual increase in July, the Consumer Price Index (CPI) measured 2.5% over the last 12 months, the lowest reading since February 2021.
On a monthly basis, prices increased 0.2% on a seasonally adjusted basis in August, the same monthly increase as July.
The index for shelter rose 0.5% in August and was one of the primary drivers of inflation during the month. According to an analysis by the NAHB, shelter costs contributed over 70% of the total 12-month increase in core inflation.
On an annual basis, the shelter index increased by 5.2%. Other indices with notable increases over the past 12 months include motor vehicle insurance (+16.5%), medical care (+3.0%), recreation (+1.6%), and education (+3.1%).
The NAHB’s “real” rent index—which indicates whether inflation in rents is faster or slower than overall inflation—rose by 0.1% in August. The real rent index is calculated by dividing the price index for rent by the core CPI. Over the first eight months of 2024, the growth rate in the real rent index averaged 0.1%, slower than the average of 0.2% over the same period in 2023.
