Consumer Prices Rise Most in 14 Months
In August, inflation made its biggest monthly jump since January, according to Department of Labor data cited by .
Whats going on: The consumer price index, which measures costs across a broad variety of goods and services, rose a seasonally adjusted 0.6% for the month, and was up 3.7% from a year ago. Economists surveyed by Dow Jones were looking for respective increases of 0.6% and 3.6%.
- Excluding food and energy priceswhich can be highly volatile from month to monthcore CPI rose a more moderate 0.3%.
- The Federal Reserve focuses more on core CPI, which offers a better long-term look at inflations direction.
The details: Energy prices accounted for most of the rise, increasing 5.6% on the month (including a 10.6% rise in gasoline prices).
- Food costs increased 0.2%, while shelterwhich constitutes approximately one-third of the CPI weightingrose 0.3%.
Impact on workers: The jump in headline inflation hit worker paychecks. Real average hourly earnings declined 0.5% for the month, though they were still up 0.5% from a year ago, the Labor Department said in a separate release.
What it means: The August CPI report wont change the Feds apparent decision to skip a rate hike at its meeting on Sept. 1920, but it may mean there is potential for another rate increase in the next few months, reports.
- Over the past 17 months, in an effort to combat inflation, the central bank has increased its benchmark borrowing rate by 5.25 percentage points.
