WASHINGTON - The consumer price index rose 0.4% in August, driven by higher gasoline prices, the Labor Department reported today.
Core prices, which exclude food and energy, rose 0.1% for the month, the second consecutive monthly increase.
Core prices rose 1.4% from July 2008, the smallest annual increase since February 2004. Total consumer prices fell 1.5% from a year ago marking the sixth consecutive month the annual CPI has been negative.
Economists polled by Thomson Reuters expected CPI to increase 0.3% and for core prices to increase 0.1%, according to the median estimate.
Gasoline jumped 9.1% in August and accounted for more than 80% of the overall CPI increase. Gasoline prices are down 30% from last August. All energy prices rose 4.6% in August.
The federal government's "cash for clunkers" program, which ended on Aug. 25, contributed to the largest annual decline in new vehicle prices since 1972. The CPI index included the cost of new cars after the $3,500 or $4,500 federal subsidy, and also reflects dealer incentives not associated with the federal program.
Real average hourly earnings fell 0.2% and grew 4.5% from a year ago.
