Consumer prices rose 0.4 percent in August, and core inflation came in hotter than economists expected, according to Labor Department data released Friday. Over the past year, the consumer price index is up 3.4 percent, matching July’s annual pace.
Core prices, which strip out food and energy, rose 0.3 percent for the month and are up 2.4 percent over the past year. Economists had forecast core prices would rise just 0.2 percent for the month. The bigger-than-expected jump is likely to push the Federal Reserve toward raising interest rates when it meets next week.
Gasoline drove much of the monthly increase, jumping 3.9 percent in August and accounting for more than a third of the overall rise in prices. Gas is now up 27.4 percent from a year ago.
Grocery prices held flat for the month but are up 2.2 percent year-over-year. Eating out got more expensive too, with restaurant prices up 0.3 percent for the month and 3.4 percent for the year.
Shelter costs, which make up a large share of household budgets, rose 0.3 percent in August, putting the yearly increase at 3 percent. Core services prices, which exclude energy, climbed 0.3 percent and are up 3 percent over the past year. Core goods prices rose a more modest 0.1 percent for the month and are up just 0.7 percent from a year ago.
Electricity was one of the few bright spots, falling 0.2 percent in August, the second decline in three months. It’s still up 3.8 percent for the year, though.
Medical care offered some relief: medical services fell 0.2 percent and medical goods fell 0.2 percent as well. Prescription drug prices held flat after two months of declines and are down 2.9 percent from a year ago. Non-prescription drugs fell 1 percent, the second straight monthly drop, and are down 2 percent for the year.
Major appliances jumped 1.4 percent after two months of declines but remain down 1.9 percent from last year. Furniture fell 0.9 percent for the month and is down 0.8 percent year-over-year.
New car and truck prices rose 0.3 percent and are up 0.6 percent from a year ago. Used vehicles rose 0.4 percent for the second straight month but remain down 2.3 percent compared to last August.
Apparel prices were flat for the month, up 3.6 percent for the year.
