United States: Inflation accelerates in August
September 16, 2016
Seasonally-adjusted consumer prices increased 0.2% in August compared to the previous month. The result came in above the flat reading in July and overshot the 0.1% rise the markets had expected. It reflected a broad-based increase in most prices, which more than offset a decline in food and energy prices. Inflation rose from 0.8% in July to a four-month high of 1.1% in August.
Core consumer prices, which do not include food and energy prices, increased 0.3% over the previous month, which came in above both the 0.1% rise observed in July and the 0.2% market analysts had forecast. Core inflation inched up from July’s 2.2% to 2.3% in August.
Although the Federal Reserve targets an alternative measure of inflation called the personal consumption expenditures price index, it also follows the core inflation measure closely to judge whether inflationary pressures are increasing in the economy.
Author: Ricardo Aceves, Senior Economist