US Inflation Surges 1.7% as Consumer Prices Rise 0.6% in August 2012
US inflation rose in August by the most in more than three years as consumers paid sharply higher fuel bills, the US government reported Friday in Washington.
Led by surging prices at the pump, consumer prices jumped 0.6 percent in August after being flat in the previous two months. The increase was the sharpest since mid-2009.
"The seasonally adjusted increase in the all items index was the largest since June 2009. About 80 percent of the increase was accounted for by the gasoline index, which rose 9.0 percent and was the major factor in the energy index rising sharply in August after declining in each of the four previous months," the US Labor Department said in its monthly Consumer Price Index (CPI) report.
Energy prices overall were up 5.6 percent. Overall food costs were 0.2 percent higher. Fresh fruit prices, in particular, jumped 1.9 percent. Meats, poultry, fish, and eggs rose 0.4 percent. Restaurant and fast food prices climbed 0.3 percent.
Stripping out the more volatile food and energy categories, core US inflation rose 0.1 percent in August — the same increase as in July. If Americans actually lived without such costs, inflation could be considered tame.
"I think inflation will remain benign for some time," Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report, according to Bloomberg. "The consumer’s still very, very price-sensitive, and rightfully so because the unemployment rate’s high, wage growth is barely keeping up with inflation."
In addition to higher energy and food bills, US consumers paid 0.2 percent more for shelter, electricity, new vehicles and medical care service. Government watched items that fell included clothing by 0.5 percent, used car prices by 0.9 percent and airline fares by 1.3 percent.
US inflation advanced 1.7 percent over the past year compared to 1.4 percent in July.
Core US inflation advanced 1.9 percent over the past 12 months, which was down from the 2.1 percent increase in July. The core US inflation rate is watched closely by the Federal Reserve as it helps determine where the central bank sets its key interest rate. The level is near the Fed’s 2.0 percent target area.
"Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable," the Fed’s FOMC said in its monetary policy statement on Thursday.
"The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective."
The following grid offers US Labor Department inflation data ranging from February to August and over the past 12 months.
February – August 2012 Consumer Prices – Gains (percent)
|June 2012||July 2012||Aug 2012||12
|Food at home||.0||0.1||0.2||-0.1||0.1||.0||0.1||1.5|
|Food away from home||0.1||0.2||0.3||0.2||0.2||0.2||0.3||2.8|
|Gasoline (all types)||6.0||1.7||-2.6||-6.8||-2.0||0.3||9.0||1.8|
|Utility (piped) gas service||-3.4||0.9||-1.8||-4.1||1.7||-0.2||2.8||-11.2|
|All items less food, energy||0.1||0.2||0.2||0.2||0.2||0.1||0.1||1.9|
|Comm. less food, energy||0.1||0.2||0.2||0.2||0.2||.0||-0.2||0.7|
|Used cars and trucks||-0.2||1.3||1.5||1.0||.0||-0.5||-0.9||-0.6|
|Services less energy||0.1||0.2||0.3||0.2||0.2||0.1||0.1||2.4|
Consumer Price Index figures for September 2012 get released by the US Labor Department on October 16, 2012 at 8:30 AM ET. CPI information is used as the core data for this site’s Inflation Calculator.