WASHINGTON – The consumer price index rose 0.4% in August, slightly ahead of expectations for a 0.3% gain due to a sharp rise in gasoline prices, while core CPI posted an as-expected 0.2% rise, but was close to being rounded up to 0.3%, data released Thursday by the Bureau of Labor Statistics showed.
Within core CPI, owners equivalent rents rose 0.3%, while the lodging away from home category rose 4.4% after a record 4.2% plunge in July. Prices of new vehicles were flat, and used vehicles prices were down 0.2%, but apparel prices rose 0.1%.
Food prices were up 0.1% in August, with food at home down and food away from home up. Total CPI excluding just food prices would have been up 0.5%
Energy prices jumped 2.8% in the month, with a 6.3% surge in gasoline prices and a 2.9% rise in fuel oil prices. Excluding only energy prices, the August CPI would have been up 0.2%. Energy prices are likely to rise sharply in the coming months due to supply shortages from the hurricane-impacted regions. Higher gasoline pump prices have already been seen in September.
The year/year rate for overall CPI now stands at 1.9%, up from the 1.7% rate in July. For core CPI, the year/year rate remained at 1.7%. Unrounded, the month/month rise for core CPI was up 0.248%, close to being rounded up to 0.3%.
Overall, the data points to contained core consumer inflation, with the year/year rate remaining well below the 2% threshold, allowing the FOMC to maintain a very slow pace of policy tightening in the face of negative factors such as the hurricanes.
