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Report: Gas prices down, but inflation still high

Sectors like food and housing still showed increases in August, per the report.

ARLINGTON, Va. — While consumers may be happy with the 13th straight weekly drop in gas prices, Tuesday's labor bureau report shows continually high inflation.

Northern Virginia gas stations are seeing prices as low as $3.39 now, after the national gas price average hit more than $5 over the summer.

“I think it's hopeful news, definitely the gas prices have dropped," American University Management professor David Jacobs said. "There's still increasing prices in important sectors.”

Food and housing prices, in particular, continue to increase.

“The lesson we should derive from that is that inflation isn't the same across the board," Jacobs said. "So if we're looking for solutions, we need to be aware of this sectoral differences.”

RELATED: Gas prices decline hits 13 straight weeks; average stands at $3.67

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Jacobs said the drop in gas prices has helped level out the overall Consumer Price Index, which measures the price of different goods and only saw a .1% increase in August, but overall prices are still 8% higher than they were at this time last year.

Next week, the Federal Reserve will decide on its rate, which impacts the U.S. economy in total.

“We need to be a little bit cautious, I think, about willy nilly increases in interest rates by the Federal Reserve's word, if in fact, it isn't addressing specific supply issues in specific sectors. And it will result in unemployment," Jacobs said.

He hopes decision-makers can attack price problems industry by industry.

“We're not going to get into the problem with energy by Federal Reserve Board action. We have a war going on. And we have supply side issues, we have political issues that vastly affect that situation," he said. "We're seeing progress there, which is great. But we don't think we can anticipate what will happen next."

Jacobs cautions against counting on gas prices continuing to decrease, saying they're volatile for the aforementioned reasons and to plan accordingly.

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