Close-up of model airplane sitting atop dollar bills. (photo via alfexe /iStock / Getty Images Plus)
The latest Bureau of Labor Statistics’ Consumer Price Index (CPI) showed that prices rose slightly in August, making inflation worse for potential travelers and possibly causing the Federal Reserve to increase interest rates next week.
According to ABCNews.com, the CPI rose 0.1 percent in August, a slight increase from the flat month-to-month movement in July, while it climbed 8.3 percent over the past year in August, a slight slowdown from 8.5 percent in July.
“When it comes to travel, today’s inflation data provides some good news for price-conscious consumers,” NerdWallet travel expert Sally French said. “Hotels and airfares hit record highs during the summer of 2022, but those prices have reached a top.”
While the economy continues to struggle, the CPI showed that the cost of gasoline continued to fall significantly, dropping 10.6 percent in August. The national average price for a gallon of gas stood at $3.72 to start the week, a massive decline from the peak of $5.01 in mid-June.
There were also several positive price changes for travel-related industries this month, including airfares being down 8.8 percent, rental car prices being down 4.6 percent and hotel room rates being down about 2.3 percent.
“Even though prices are dipping, they’re still mostly higher than they were this time last year, when there were more travel restrictions,” French continued. “Airfares are still up 33 percent in August 2022 versus August 2021 due to a combination of factors, including high travel demand, jet fuel prices and staffing shortages.”
“2022 prices are also far higher than their pre-pandemic levels—August 2022 airfares are up nine percent versus August 2019 airfares,” French said. “If you’re building your next vacation budget based on a 2019 trip, understand that you’ll likely pay far more now for pretty much every expense.”
Earlier this month, the CPI found that car rental prices jumped 48 percent from July 2019 to July 2022, which is much higher than the seven-percent hotel price increase over the same period and the 16-percent airfare cost increase.
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