US Inflation Rate Beats Expectations in August

Consumer prices in the United States went up 1.1 percent year-on-year in August of 2016, higher than 0.8 percent in July and above market forecasts of a 1 percent gain. It is the biggest inflation figure in four months, boosted by rising shelter and medical cost.

Year-on-year, prices of services less energy increased 3.2 percent, following a 3.1 percent rise in July: inflation went up for shelter (3.4 percent from 3.3 percent), transportation services (3.1 percent from 3 percent) and medical care (5.1 percent from 4.1 percent). Food inflation eased for the fourth straight month to 0 percent from 0.2 percent in July, reaching the lowest since February 2010 when food prices edged down 0.2 percent. In addition, energy prices fell at a slower pace (-9.2 percent from -10.9 percent in July).

Annual core inflation which excludes food and energy rose to 2.3 percent from 2.2 percent in the previous month and above market expectations of 2.2 percent.  

On a monthly basis, consumer prices rose 0.2 percent after being flat in the previous month and also beating forecasts of a 0.1 percent gain. Cost of energy and food were both unchanged: major energy component indexes were mixed, with increases in natural gas and electricity offsetting declines in gasoline and fuel oil. The food at home index declined for the fourth month in a row, offsetting an increase in the index for food away from home.   

The core index went up 0.3 percent, the largest rise since February. Cost rose for shelter, medical care, motor vehicle insurance, apparel, communication and tobacco, but fell for used cars and trucks, household furnishings and operations, recreation and airline fares.

US Inflation Rate Beats Expectations in August

BLS | Joana Taborda |
9/16/2016 1:00:54 PM