WASHINGTON (Alliance News) – Reflecting a sharp jump in energy prices, the Labor Department released a report on Thursday showing US consumer prices increased by slightly more than anticipated in the month of August.
The Labor Department said its consumer price index climbed by 0.4% in August after inching up by 0.1% in July. Economists had expected consumer prices to rise by 0.3%.
The bigger than expected increase in consumer prices was partly due to the spike in energy prices, which surged up by 2.8% in August after edging down by 0.1% in July.
Gasoline prices led the way higher, soaring by 6.3% during the month, although natural gas prices continued to decline.
Excluding the jump in energy prices as well as a modest increase in food prices, the core consumer price index rose by 0.2% in August after ticking up by 0.1% for four straight months.
The increase in core prices, which matched economist estimates, was primarily due to 0.5% growth in shelter prices.
Along with the shelter index, the indexes for motor vehicle insurance, medical care, and recreation also increased during the month.
Meanwhile, the Labor Department said the indexes for airline fares and used cars and trucks were among those that declined.
The report also said the annual rate of growth in consumer prices accelerated to 1.9% in August from 1.7% in July, although the annual growth in core consumer prices was unchanged at 1.7%.
“August’s report confirms that the decline in core CPI inflation was, at least partly, due to idiosyncratic factors that are now fading or going into reverse,” said Paul Ashworth, chief US economist at Capital Economics.
He added, “We still don’t expect the Fed to hike interest rates again this year, but it will return to tightening policy more aggressively next year.”
The Labor Department released a separate report on Wednesday showing producer prices rose by slightly less than expected in the month of August.
The producer price index for final demand edged up by 0.2% in August after slipping by 0.1% in July. Economists had expected the index to climb by 0.3%.
Core producer prices inched up by 0.1% in August after dipping by 0.1% in July. Core prices had been expected to rise by 0.2%.
Compared to the same month a year ago, producer prices were up by 2.4% in August, a notable acceleration from the 1.9% growth seen in July.
The year-over-year growth in core consumer prices also accelerated to 2.0% in August from 1.8% in July.
Copyright RTT News/dpa-AFX