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The CPI was up more than expected in August. Food played a role.
 

The BLS CPI report for August shows the price of food and beverages jumped 0.5 percent with food at home rising 0.6 percent.

Six CPI Food Categories Month-Over-Month
 

CPI Food Category Month-Over-Month Details

• Food and Beverage: 0.5 percent
• Meat, Fish, Poultry, Eggs: 1.0 percent
• Cereals and Bakery: 0.1 percent
• Dairy: 0.1 percent
• Fruits and Vegetables: 1.6 percent
• Nonalcoholic Beverages: -0.7 percent

If your food basket in August was nonalcoholic beverages, cereal, and dairy, congratulations.

If your basket was fruits and vegetables, or meat, fish, poultry, and eggs, you had another bad month.

CPI Food at Home vs Away from Home Year-Over-Year
 

At Home vs Away, Year-Over-Year

• Food at Home: 2.7 percent, up from0.9 percent in August of 2024
• Food Away from Home: 3.9 percent, up from 3.4 percent in January of 2025.
• All Food: 3.2 percent, up from 2.1 percent in May of 2004.

CPI Food Categories Year-Over-Year

• Meat, Fish, Poultry, Eggs: 5.6 percent, up from -0.9 percent in January of 2024
• Cereals and Bakery: 1.1 percent, up from -0.5 percent in November of 2024
• Dairy: 1.3 percent, up from -1.9 percent in March of 2024
• Fruits and Vegetables: 1.9 percent, up from -0.9 percent in April of 2025

Expect a sustained spike in fruits and vegetables due to tariffs and deportations.

Screwed Up Measures of Inflation

These CPI and PCE reports are all worse than they look because both are very screwed up measures of inflation.

For starters, the BLS incorrectly underweights food away from home.

For discussion, please see Where Do You Spend Money on Food? How Screwed Up Are the BLS Weights?

Does the BLS match your budget?

BLS miscalculations on shelter are even more pronounced.

Is Homeowners Insurance Understated in the CPI?

I discussed very serious errors in the BLS calculation of shelter inflation in Is Homeowners Insurance Understated in the CPI? Shop Around!

Our Insurance went up by $2,000. Then another $2,000. Here’s our story.

The BLS does not factor in homeowner’s insurance at all, only a home’s contents.

No Reason to Cut Rates

Earlier today I noted CPI Provides No Reason for Fed to Cut Interest Rates, It Will Anyway

The CPI was higher than expected in August, but the Fed will do what it wants to do.

The Fed always does what it wants. It uses its dual mandate as an excuse. This time there is added pressure from Trump.

However, the labor market is weakening fast. This gives the Fed cover for a series of cuts if it wants.

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