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U.S. consumer prices pick up growth pace in August

Xinhua, September 17, 2016 Adjust font size:

U.S. consumer prices picked up pace in August, indicating that inflation pressure starts to firm.

Consumer Price Index (CPI), a main gauge of inflation, increased 0.2 percent in August on a seasonally adjusted basis, compared to zero growth in July, said the Labor Department on Friday. On a year-on-year basis, the index increased 1.1 percent, up from July's growth of 0.8 percent.

Both the energy and food indexes were unchanged in August. Excluding the volatile food and energy categories, the so-called core CPI went up 0.3 percent in August on a seasonally adjusted basis, the largest rise since February 2016. The core CPI was up 2.3 percent from a year earlier, slightly higher than July's 2.2 percent increase.

However, the core personal consumption expenditure price index, the Federal Reserve's favored inflation gauge, increased 1.6 percent year on year in July, below the central bank's 2 percent inflation target.

Fed governor Lael Brainard recently called for continuing taking a prudent approach to further increase interest rates because of potential weakness in the U.S. and global economy.

Another top Fed official Governor Daniel Tarullo also said that U.S. inflation should pick up "in a sustainable way" to be at the central bank's target of 2 percent rather than being below the target before Fed raising rates again.

Analysts said dovish remarks made by these two influential Fed officials would make it harder for the central bank to raise rates as soon as the next policy meeting on Sept. 20-21. About 74 percent of 62 economists surveyed by the Wall Street Journal this month also believed that the Fed will wait until December to raise rates. Enditem