The latest report from the U.S. Labor Department finds the prices of U.S. consumer goods and services dropped for the second month in a row, but overall costs were up 8.3% in August over the same time last year.

While down a bit from July’s 8.5% rate, and well off June’s 9.1%, the data is likely to bolster the Federal Reserve’s tactic of making aggressive benchmark interest rate hikes to try to quell U.S. inflation that’s been running at or near record rates since late last year. The monetary body is scheduled to meet next week.

Mountain West states, including Utah, saw the highest regional inflation in the country in August, coming in at 9.6%

The new Consumer Price Index report found a 0.1% overall rise since July, but a big drop in gasoline prices helped offset the impacts of steeper rises in the costs of basic necessities.

Gas, food prices

Shelter, food and medical care all saw continued price increases in August. While overall gas prices dropped 10.6% last month, electricity and natural gas prices rose.

The food index, which captures price changes in both groceries and food purchased away from home was up 11.4% in August over the same time last year, the biggest year-over-year increase since 1979, according to the Labor Department. Groceries are up 13.5% in the last year.

While gas came down from July to August, prices are still up over 25% from a year ago.

According to AAA data, the average price of gas across the U.S. on Tuesday was $3.71 per gallon, down from an all-time record set in June of $5.01 per gallon.

Utah gas prices continue to run well above the national average with the average price of a gallon of regular at $4.30 on Tuesday, according to AAA. Utah set its own all-time high gas price of $5.26 per gallon in early July.

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Most Fed watchers expect the central bank to announce a third straight three-quarter-point hike, to a range of 3% to 3.25%, The Associated Press reports. The Fed’s rapid rate increases — the fastest since the early 1980s — typically lead to higher costs for mortgages, auto loans and business loans, with the goal of slowing growth and reducing inflation. The average 30-year mortgage rate jumped to nearly 5.9% last week, the highest figure in nearly 14 years, according to mortgage buyer Freddie Mac.

Chairman Jerome Powell has said the Fed will need to see several months of low inflation readings that suggest price increases are falling back toward its 2% target before it might suspend its rate hikes.

Wages are still rising at a strong pace — before adjusting for inflation — which has elevated demand for apartments as more people move out on their own. A shortage of available houses has also forced more people to keep renting, thereby intensifying competition for apartments.

Rising rents and more expensive services, such as medical care, are also keeping inflation high.

Rent price hikes are slowing — but are outpacing home price increases

Contributing: Associated Press