Oil's upward price movement is making the Federal Reserve’s path toward a 2% inflation target more difficult.
The crude market's rise is likely to have lifted overall inflation last month. And while core inflation — which strips out food and energy costs — has been on a downward trend, economists worry that higher energy prices could increase input costs for goods and services, leading companies to raise prices on everything from airfares to furniture.
"I’d say the rise in oil prices since late June/early July has clearly put upward pressure on gasoline prices and will lead to a large boost in the August headline CPI [Consumer Price Index]," Omair Sharif, president of Inflation Insights, tells Yahoo Finance.
He added, “You may see higher fuel surcharges seep into higher prices for food, for food services, and a variety of goods that are moved by truck — for example furniture, appliances. You can also see higher jet fuel costs make their way into higher airfares."