Consumer prices in the U.S. increased in line with economist estimates in the month of August, according to a report released by the Labor Department on Friday, with the price growth largely due to a substantial rebound by energy prices.
The Labor Department said its consumer price index rose by 0.6 percent in August after coming in flat in three of the four previous months.
The increase in prices, which reflected the fastest rate of growth since June of 2009, matched the expectations of economists.
The price growth was largely due to a 5.6 percent jump in energy prices, which came on the heels of decreases in each of the four previous months. Energy prices also rose at their fastest rate since June of 2009.
Higher gasoline prices accounted for most of the increase in energy prices, with gas prices surging up by 9.0 percent in August following a 0.3 percent increase in July.
Food prices increased by 0.2 percent in August after edging up by 0.1 percent in July. The modest increase reflected increases by three of the six major grocery store food group indexes.
Core consumer prices, which exclude food and energy prices, inched up by 0.1 percent in August, matching the increase seen in July. Economists had expected core prices to rise by 0.2 percent.
The Labor Department said the rent index increased 0.2 percent and the index for owners' equivalent rent rose 0.3 percent.
The indexes for medical care, personal care, new vehicles, and recreation also increased in August, while the index for used cars and trucks fell 0.9 percent, the apparel index fell 0.5 percent, and the index for household furnishings and operations fell 0.3 percent.
Compared to the same month a year ago, consumer prices increased by 1.7 percent in August compared to the 1.4 percent growth seen in July.
Core prices increased at an annual rate of 1.9 percent in August, reflecting a slowdown from the 2.1 percent growth seen in the previous month.
Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, I expect consumer prices going nowhere but higher and we'll see to what extent wages keep up in order to keep the middle class from not falling further behind."
The Labor Department released a separate report on Thursday showing that a substantial rebound in energy prices contributed to a bigger than expected increase in producer prices in August.
The report showed that the producer price index surged up by 1.7 percent in August following a 0.3 percent increase in July. Economists had expected the index to increase by 1.4 percent.
Excluding the jump in energy prices as well as a notable increase in food prices, the core producer price index edged up by 0.2 percent in August after rising by 0.4 percent in July. The modest increase in core prices came in line with economist estimates.
by RTT Staff Writer
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