The U.S. Consumer Price Index (CPI) rose 3.7% year-over-year in August, according to the Department of Labor, with the increase largely due to a spike in gasoline prices, while the overall CPI data showed a decline in inflation.
The August CPI data is up from a 3.2% year-over-year increase in July.
Core CPI prices, which exclude food and energy, rose 4.3%, down from 4.7% in July, but still more than double the Federal Reserve’s 2% target. While this is the largest monthly increase in inflation since January, it does not reflect the small increase in the core CPI.
“The move higher in headline inflation is a head fake as it was mostly driven by a huge 10.5% jump in energy commodity prices,” Reuters quoted Brian Jacobsen, chief economist at Annex Wealth Management in Wisconsin, as saying on Wednesday.
The August CPI data has analysts largely expecting the Fed to hold off on another interest rate hike at its meeting next week, as most economic forecasts are for a gradual decline in inflation for the rest of the year.