PAGE HEADER INFLATION UPDATE
Economic Indicators
Consumer Price Index Rises For August 2025, the U.S. Bureau of Labor Statistics reported a 12-month increase of 2.9% before seasonal adjustment in the Consumer Price Index for All Urban Consumers (CPI-U).
The food index was up 3.2% for the 12 months ending August 2025, up from 2.1% a year prior.
Annual inflation for food at home was +2.7% in the 12 months ending August 2025, compared to +0.9% in August 2024:
• The price of cereals and bakery products inched up 1.1%. • Dairy and related products rose 1.3%. • Meats, poultry, fish, and eggs jumped 5.60%. • Egg inflation slowed to 10.9%.
Food away from home increased 3.9% in the same period.
Producer Price Index Update The Producer Price Index (PPI) measures how much manufacturers pay to produce consumer goods. Without seasonal adjustment, the PPI for final demand continued upward at 2.6% in the 12 months ending August 2025, while the PPI for final demand foods expanded more quickly at +3.5%. However, the PPI for dairy products fell 2.0%.
GDP and Consumer Spending
Real gross domestic product (GDP) increased at an annual rate of 3.3% in Q2 2025, according to the U.S. Bureau of Economic Analysis. This compares to +3.0% in Q2 of 2024. Finance and insurance, information, and nondurable-goods manufacturing were the leading contributors to growth in real GDP nationally. Personal consumption expenditures (PCE) grew in all 50 states and the District of Columbia in 2024. Current-dollar PCE climbed 5.6% nationally that same year, with health care and housing & utilities as the largest contributors.
IMF Inflation Forecast
The International Monetary Fund (IMF) projected annual U.S. inflation to stay about the same in 2025 as 2024 at 2.99%, then slow to 2.47% in 2026 before sliding down to the range of 2.11%– 2.18% through 2030. It projected Canada’s annual inflation to drop to 1.98% in 2025 from 2.4% in 2024, then increase slightly to 2.16% in 2026 before falling back down around 2%.
Consumer Sentiment Wavers
Consumer sentiment has been rocky the past few years. It sank to 55.1 in September 2025, as measured by the University of Michigan Index of Consumer Sentiment. The index averaged in the high 90s before the COVID pandemic but has been lower ever since. The highest score since the end of 2021 was 79.4 in March 2024.
In a September 2025 survey by the University of Michigan Institute of Social Research, consumers expressed frustration with high prices, weakening personal finances, and the potential for a weaker labor market. They expected 4.7% inflation over the next year and 3.7% over the next five years.
Sources -
University of Michigan Institute of Social Research. “Surveys of Consumers.” Accessed September 26, 2025.
University of Michigan Institute of Social Research. “The Index of Consumer Sentiment.” Accessed September 23, 2025.
U.S. Bureau of Economic Analysis. “Gross Domestic Product by State and Personal Income by State, 2nd Quarter 2025 and Personal Consumption Expenditures by State, 2024,” September 26, 2025
U.S. Bureau of Labor Statistics. “12-Month Percentage Change, Consumer Price Index, Selected Categories.”. Accessed November 24, 2024.
U.S. Bureau of Labor Statistics. “CPI for All Urban Consumers (CPI-U) 1982- 84=100 (Unadjusted) - CUUR0000SA0, All Items in U.S. City Average, All Urban Consumers, Not Seasonally Adjusted.”. Accessed September 26, 2025.
U.S. Bureau of Labor Statistics. “PPI for final demand components, 12-month percent change, not seasonally adjusted, August 2025.”
U.S. Bureau of Labor Statistics. “Producer Price Indexes for Final Demand, 12-Month Percent Change, Not Seasonally Adjusted.”. Accessed November 24, 2024.
U.S. Bureau of Labor Statistics. “Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure
category,” September 11, 2025.
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