The seasonally-adjusted U.S. Consumer Price Index rose in line with expectations on both fronts, as the core rate ticked up 0.2% (0.194%) in August, contributing to a 2.5% year-over-year change. Total inflation fell 0.1% (-0.137%) in the month but rose 5.4% on the year, according to data released by the U.S. Labor Department on Tuesday.
There were no revisions to the prior month's data. The annual gains in inflation were one-tenth above expectations in both the core and all-items indexes.
The Fed's unofficial target rate for core inflation is 2.0% year-over-year.
Energy prices fell 3.1% in August but has gained 27.2% on the year, while gas prices fell 4.2% in the month but have risen 35.6% in the year. Fuels & utilities fell 1.1% in the month but rose 15.3% on the year.
By Patrick McGee and edited by Stephen Huebl
©CEP News Ltd. 2008