Analysts had predicted that the August inflation data announced today would increase by 0.6 percent on a monthly basis.
CPI was announced as 0.3% on a monthly basis (Expected 0.2% Previously 0.2%) and 3.7% on an annual basis (Expected 3.6% Previously 3.2%).
Last Month’s CPI Rates
Last month, the Consumer Price Index (CPI) was reported to have increased by 0.2% on a monthly basis and 3.2% on an annual basis. This indicates that inflation is on the rise and its economic effects continue to be observed.
What Happens if the CPI Increases?
The Consumer Price Index (CPI) is generally considered a metric that shows the average changes in the prices of a specific group of goods and services purchased by a typical consumer. It serves as an indicator that measures the prices of goods and services bought by households. An increase in the CPI is usually interpreted as a sign of inflation, which can adversely affect consumers’ purchasing power. Specifically, a rise in energy prices can inflate the costs of essential services like transportation, heating, and electricity.
In the event that inflation increases, central banks typically respond by raising interest rates to bring inflation under control. This action leads to higher costs of credit, which imposes additional financial burdens on both consumers and the business community.