US consumer prices up 5.3% in August, in line with expectation

By Ovunc Kutlu

ANKARA (AA) - US consumer prices rose 5.3% in August on an annual basis, in line with market expectation, according to the US Labor Department on Tuesday.

The Consumer Price Index (CPI), which measures changes in the price of goods and services from a consumer perspective, rose 5.4% in June and July, marking their largest 12-month increases since August 2008.

In August, the CPI rose 0.3% from the previous month. While the market consensus was a 0.4% monthly increase, CPI rose 0.5% in July from the month before.

"The indexes for gasoline, household furnishings and operations, food, and shelter all rose in August and contributed to the monthly all items seasonally adjusted increase," the Labor Department said in a statement.

The food index rose 0.4% in August, while the energy index increased 2%, and the gasoline index soared 2.8%, it added.

Core consumer prices, which exclude food and energy, rose 0.1% in August from the previous month, while they were up 4% year-on-year. The market estimates were 0.3% and 4.2%, respectively.

While core CPI increased 0.3% in July on a monthly basis, it was up 4.3% annually.

As CPI data came below market estimates, it remains a question whether the Federal Reserve would signal next week an earlier increase in interest rates for late 2022, instead of 2023.

The central bank indicated on June 16 that it could make two rate hikes by 0.25% each in 2023 to tame the rising inflation.

The Fed Chair Jerome Powell has repeatedly said in recent months the bank would allow inflation to climb above its target of 2% for some time until full economic recovery is achieved before making change in monetary policy.