US Gasoline Prices Up, Inflation Rising
US consumer prices rose less than expected in August as increases in gasoline and rents were offset by declines in healthcare and apparel costs, and underlying inflation pressures also appeared to be slowing.
The US Labor Department said on Thursday its Consumer Price Index increased 0.2% last month after a similar gain in July. In the 12 months through August, the CPI increased 2.7%, slowing from July’s 2.9% rise.
Excluding the volatile food and energy components, the CPI edged up 0.1%. The core CPI had increased by 0.2% for 3 months running. In the 12 months through August, the core CPI increased 2.2% after rising 2.4% in July.
Economists polled by Reuters had forecast the CPI climbing 0.3% and the core CPI gaining 0.2% in August.
Despite the moderation in price increases last month, inflation pressures are steadily building up, driven by a tightening labor market and robust economic growth.
The Fed tracks a different inflation measure, the PCE (personal consumption expenditures) price index excluding food and energy, for monetary policy.
The core PCE price index increased 2.0% in July, hitting its 2% target for the 3d time this year.
An escalating trade dispute between the United States and China is expected to keep inflation high. President Donald Trump last week threatened duties on another $267-B worth of Chinese goods on top of a $200-B tariff list that is awaiting his decision.
Last month, gasoline prices rebounded 3.0% after dropping 0.6% in July.
Food prices edged up 0.1%, matching July’s rise. Food consumed at home was Unchanged.
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