Consumer prices in the U.S. increased by slightly more than expected in the month of August, according to a report released by the Labor Department on Friday.
The Labor Department said its consumer price index rose by 0.2 percent in August after coming in unchanged in July. Economists had expected prices to inch up by 0.1 percent.
With food and energy prices both unchanged during the month, the uptick in consumer prices reflected an increase in core prices.
Core consumer prices, which exclude food and energy prices, climbed by 0.3 percent in August after edging up by 0.1 percent in July. Core prices had been expected to rise by 0.2 percent.
The Labor Department said the bigger than expected increase in core prices was the largest since a matching increase last February.
Shelter and medical care prices led the way higher along with prices for motor vehicle insurance, apparel, communication, and tobacco.
Meanwhile, drops in prices for used cars and trucks, household furnishings and operations, recreation, and airline fares limited the upside.
Compared to the same month a year ago, the headline consumer price index was up by 1.1 percent in August, reflecting an acceleration from the 0.8 percent growth in July.
The annual rate of core consumer price growth also accelerated to 2.3 percent in August from 2.2 percent in the previous month.
Steve Murphy, U.S. economist at Capital Economics, said, "Overall, the August CPI report shows that domestic price pressures continue to build, but only very gradually."
"The annual rate of core PCE inflation, which is the Fed's preferred measure, has been stuck at 1.6% for most of this year," he added. "This suggests the Fed will likely wait until December before raising rates."
On Thursday, the Labor Department released a separate report showing that wholesale prices held steady in the month of August.
The Labor Department said its producer price index for final demand was unchanged in August after falling by 0.4 percent in July. Economists had expected prices to inch up by 0.1 percent.
Excluding food and energy prices, core producer prices ticked up by 0.1 percent in August following a 0.3 percent drop in July. The modest increase in core prices matched economist estimates.
Producer prices in August were unchanged compared to the same month a year ago, while core prices were up by 1.0 percent year-over-year.
by RTT Staff Writer
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