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The CPI and core inflation both rose higher than expected in August, and the dollar fell to its lowest level in over two weeks. A new Bank of America program is setting off alarms, food prices skyrocket, and more financial news
Inflation rose higher than expected in August, with the consumer price index (CPI) increasing 0.1 percent and 8.3 percent year-over-year. Core CPI, which strips out food and energy prices, rose 0.6 percent in August, double the expected amount, and 6.3 percent compared to a year ago.
Economists from Dow Jones had estimated inflation to fall by 0.1 percent and core to increase 0.3 percent. Instead, the year-over-year forecasts were 8 percent and 6 percent gains, respectively, CNBC reported.
The food index increased 0.8 percent in August. The price of food at home rose 13.5 percent. Restaurant prices climbed 0.9 percent in August and are up 8 percent year-over-year.
Shelter costs jumped 0.7 percent and are up 6.2 percent from a year ago.
Medical costs went up 0.8 percent in August and 5.6 percent year over year.
On Monday, the US dollar fell to its lowest level in over two weeks against a number of currencies despite recent strong gains, as investors grow nervous ahead of US inflation data.
The euro climbed to over a three-week high against the dollar as European Central Bank officials argue for further aggressive monetary tightening, US News reported.
The dollar and the euro are roughly at parity right now, CNN reported.
Inflation is hitting the price of food even more than most other categories. The pandemic got many people into the habit of ordering staples online, and as the cost of food continues to rise, the average online grocery order is becoming significantly more expensive, far outpacing the costs of clothing, electronics, and most other categories, The Street reported. The average online grocery price rose by 14.1% year-over-year and 1.1 percent in August, according to the latest Adobe Digital Price Index.
The price of a dozen eggs in August 2022 was 47% more expensive than in August 2021.
Bank of America is rolling out a new first-time homebuyers program specifically aimed at Black and Hispanic families in selected cities, NBC reported. However, a rep for B of A said applicants do not have to be of those races to qualify for the program, which will be offered first to select neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami.
In addition to no down payment or closing cost required, the loans will also require no mortgage insurance (PMI), an additional fee that is normally charged to buyers who put down less than 20% of the purchase price. Further, there is no minimum credit score required.
However, critics see signs of all the loose lending factors that led to the 2008 financial crisis, when Bank of America was bailed out as the economy nearly collapsed. A California attorney said the program could potentially violate her state’s Unruh Act, a 1959 law that prohibits businesses from discriminating against consumers based on various factors such as race, color, religion, ancestry, and national origin. The program may also violate the federal Consumer Credit Protection Act.
