US consumer prices pick up in August, bolstering chances of interest rate increase
In the 12 months through August, consumer inflation advanced 3.4 per cent after rising by the same margin in July
US consumer prices accelerated in August as the cost of petrol rebounded after two straight monthly declines, bolstering financial market expectations that the Federal Reserve could raise interest rates next week.
The Consumer Price Index (CPI) increased 0.4 per cent last month after edging up 0.1 per cent in July, the Labour Department’s Bureau of Labour Statistics said on Friday. In the 12 months through August, consumer inflation advanced 3.4 per cent after rising by the same margin in July.
Economists polled by Reuters had forecast the CPI increasing 0.4 per cent over the month and climbing 3.4 per cent year on year. Excluding the volatile food and energy components, the CPI rose 0.3 per cent last month after gaining 0.2 per cent in July. The so-called core CPI increased 2.4 per cent year-on-year in August after rising 2.5 per cent in July.
The US central bank tracks the Personal Consumption Expenditures (PCE) price indexes for its 2 per cent inflation target.
The government reported on Thursday an increase in the Producer Price Index in August, with strong rises in several key components that feed into the calculation of PCE inflation. That added to last week’s robust employment report for August in boosting rate increase prospects next week.