The pace of inflation in the U.S. moved sharply higher in August, pushed up by a big jump in gasoline prices.
The consumer price index rose 0.6 percent compared with the prior month, three times the monthly rate recorded in July. Compared with a year ago, the index is up 3.7 percent, more than the July reading of 3.2 percent.
The acceleration of inflation casts some doubt on how quickly the tightening of monetary policy will bring inflation back down to the Federal Reserve’s two percent goal. It also increases the odds that the Fed will hike rates another time before the end of the year.
Federal Reserve officials have said they are looking for consistent evidence over several months that inflation is moving toward its target. On a month-to-month basis, inflation fell sharply in May from 0.37 to 0.12 percent, edged up in June to 0.18 percent, and ticked down to 0.17 percent in July.
This is the sharpest monthly rise in inflation since June 2022, when the consumer price index soared 1.2 percent.
Core consumer prices, a measure that excludes energy and food prices, rose 0.3 percent for the month. That is also hotter than the 0.2 percent recorded in July. Compared with a year ago, the index is up 4.3 percent, a slowdown from the 4.7 percent year-over-year figure recorded for July.
Economists had been expecting the increase in inflation due to higher energy prices. The consensus forecast was for a 0.6 percent increase compared with July and a 3.6 percent increase in year-over-year inflation. The expectation for core inflation was for a 0.2 percent monthly increase. The year-over-year increase for core was in-line expectations for a 4.3 percent increase.