Headline figures
U.S. consumer prices rose more quickly in August, according to the Bureau of Labor Statistics. The Consumer Price Index for All Urban Consumers increased 0.4% on a seasonally adjusted basis after rising 0.1% in July. Over the 12 months through August, the all-items index increased 3.4% before seasonal adjustment, the same annual rate recorded in July.
The index excluding food and energy rose 0.3% during August, its largest monthly increase since April. Core CPI increased 2.4% over 12 months, down from 2.5% in July.
Energy drove much of the monthly increase
Gasoline prices rose 3.9% during August and accounted for more than one-third of the increase in the headline index. The broader energy index increased 2.1% during the month and 16.3% over 12 months. Fuel oil rose 10.1% in August, while electricity prices declined 0.2% and utility gas service declined 1.1%.
Food prices rose 0.1% for a second consecutive month. Grocery prices were unchanged overall. Fruit and vegetable prices declined, while egg, dairy and non-alcoholic beverage prices increased.
Services and core components
Shelter costs rose 0.3% in August. Airline fares increased 2.7%, lodging away from home rose 2.4% and communication costs increased. Medical-care prices and motor-vehicle insurance declined during the month.
Reuters reported that financial markets interpreted the figures as increasing the probability of a Federal Reserve rate rise at its next policy meeting. That interpretation reflects market pricing and economists' expectations; it is not an announced Federal Reserve decision.
How to read the data
The CPI measures changes in the prices paid by urban consumers for a representative basket of goods and services. Monthly figures cited here are seasonally adjusted unless otherwise stated, while annual comparisons are not seasonally adjusted. The Bureau of Labor Statistics notes that some seasonally adjusted series can later be revised as seasonal factors are updated.
This is a macroeconomic data explainer. It does not predict interest rates, asset prices or household outcomes, and it is not investment advice.
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