BALTIMORE, Md. — The stock market tumbled nearly 1,300 points after the August Consumer Price Indexshowed overall inflation isn't slowing down as much as many financial experts had hoped.
One bright spot for consumers is that gas prices continue to drop as many hoped falling fuel prices could help bring down the cost of other goods and services.
Rising gas prices were cited as one reason the price of food and retail goods increased this year as businesses passed those higher expenses onto consumers.
However, there are other factors still keeping other prices high.
The latest Consumer Price Index shows inflation tapped the brakes ever so slightly, dropping from 8.5 percent in July 2022 to 8.3 percent in August 2022.
Usually, a decrease is good news but many financial experts see these latest numbers as a disappointment.
MoneyTips senior credit industry analyst Nathan Grant said “most experts were expecting a bigger slow down of inflation and while the rate of inflation went down, the consumer price index did go up .1% in August.”
Loyola University Maryland associate professor of accounting JP Krahel said “so gas prices, yes, they've fallen, car prices have fallen but a lot of other things have risen to make up for it. So, that's why it really is a mixed bag.”
“The Consumer Price Index shows gas is still more than 25% higher than it was a year ago although it's more than 12% lower than what it was from July to August.
After skyrocketing to more than $5.00 a gallon this summer, the average price of a gallon of regular gas is now well below $4.00 a gallon in Maryland.
Prices have dropped more than a dollar 50 since a high of $5.02 in mid-June to about $3.50 in mid-September.
“The big thing that made this kind of worse news is that most economists, they will look at inflation through what’s called ‘core inflation,’ which removes some of those more volatile categories like gas and food, and there was showing an increase without those which usually is more of an indication of things like inflation continuing,” Grant said.
“People focus on gas prices because you drive by a gas pump, you can see that price it goes up and down day by day. But it’s the little things, I shouldn't say the little things but it’s the quieter larger things like rent that are really hurting people’s wallets and more,” Krahel said.
Looking at the basic necessities, rent is 6.3% more expensive than it was a year ago, and up 0.7% from July to August.
Utilities continue to go up in price, with electricity cost nearly 16% more this year than it did last year.
Natural gas is 33% more expensive this year, with nearly a 4% spike from July to August alone.
Shoppers continue to see their grocery bills climb with prices up 0.7% from July to August with food costing 13.5% more than it did a year ago.
Overall, price tags on clothing are ringing up about 5% more than a year ago, with clothing for women and girls seeing about, a 3% and 4% price jump respectively from July to August.
So, some consumers wonder if the price of gas is falling why hasn't that price drop trickled down to other goods and services.
“Coming out of the pandemic we still have a damaged supply chain with lots of holes in it. So, supply is down, we have a lot of people who have stimulus cash still, who have saved up, whose wages are going up, who’ve got more money to spend. Demand is going up. So, those, by themselves even absent any other world uncertainty, those would make prices go up,” Krahel said.
The stock market also doesn't like uncertainty, which is why the Dow dropped on Tuesday. Many experts say inflation hasn't released its grip on the economy just yet and its still too soon to tell when it will end.
Another positive note beside falling gas prices is that used car prices have come down slightly, and airfares have been dropping the summer.