BLS Reveals Gasoline Role in August Consumer Price Index

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.6 percent in August on a seasonally adjusted basis, after increasing 0.2 percent in July, the U.S. Bureau of Labor Statistics (BLS) reported in a release posted on its website this week, adding that, over the last 12 months, the all items index increased 3.7 percent before seasonal adjustment.

“The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase,” the BLS stated in the release.

“Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month. The energy index rose 5.6 percent in August as all the major energy component indexes increased,” it added.

“The index for all items less food and energy rose 0.3 percent in August, following a 0.2-percent increase in July,” it continued.

In the release, the BLS noted that the all items less food and energy index rose 4.3 percent over the last 12 months.

“The energy index decreased 3.6 percent for the 12 months ending August, and the food index increased 4.3 percent over the last year,” the release stated.

A Council of Economic Advisers (CEA) blog posted on the White House website this week highlighted that “headline Consumer Price Index inflation was 0.6 percent in August and 3.7 percent over the past year”, adding that “the main factor behind the jump was the August increase in the price of retail gasoline”.

“This price went up 10.6 percent over the month, and gasoline contributed 34 basis points of the overall monthly CPI, or a bit more than half of the 0.6 percent rate (over the past year, the gasoline price is down 3.3 percent),” the blog noted.

In a statement on the August Consumer Price Index posted on the White House website, U.S. President Joe Biden said the report provides more evidence that core inflation is trending down toward pre-pandemic levels at a time when employment remains strong.

“Unemployment has remained below four percent for 19 months in a row, the share of working age Americans with a job is the highest in 20 years, and real wages are higher now than they were before the pandemic,” Biden added in the statement.

“Overall inflation has also fallen substantially over the last year, but I know last month’s increase in gas prices put a strain on family budgets. That’s why I remain laser-focused on cutting energy costs, including by investing in clean energy to bolster our energy security,” he went on to state.

As of September 15, the average price of regular gasoline in the U.S. stood at $3.866 per gallon, according to the AAA Gas Prices website. Yesterday’s average price stood at $3.858 per gallon, the week ago average stood at $3.808 per gallon, the month ago average stood at $3.862 per gallon, and the year ago average stood at $3.698 per gallon, the AAA Gas Prices site showed.

The U.S. Energy Information Administration’s (EIA) latest fuel update shows that U.S. regular gasoline prices were $3.813 per gallon on August 28, $3.807 per gallon on September 4, and $3.822 per gallon on September 11. Prices are up $0.132 year on year, the update outlined.

According to the EIA’s latest short term energy outlook (STEO), the organization sees U.S. retail gasoline prices averaging $3.60 per gallon in 2023 and $3.52 per gallon in 2024.

The EIA expects retail gasoline prices to average $3.75 per gallon in the third quarter, $3.69 per gallon in the fourth quarter, $3.54 per gallon in the first quarter of next year, $3.64 per gallon in the second quarter of 2024, $3.56 per gallon in the third quarter, and $3.34 per gallon in the fourth quarter, the STEO showed.

U.S. retail gasoline prices averaged $3.97 per gallon in 2022, according to the September STEO.

“We reduced our U.S. gasoline consumption forecast because the U.S. Census Bureau revised its population estimates for the United States to include fewer people of working age and more people of retirement age, who tend to drive less,” the EIA noted in its latest STEO.

“The revised population estimates have also resulted in a downward revision of our vehicle miles traveled (VMT) forecast, which directly affects motor gasoline consumption,” it added.

“We forecast U.S. gasoline consumption will average 8.9 million barrels per day in 2023 and 8.7 million barrels per day in 2024. Our 2024 forecast is down by 0.2 million barrels per day from our August STEO,” the EIA continued.

To contact the author, email andreas.exarheas@rigzone.com