EmailConsumer prices increased 0.6% in August after being unchanged in July. The Briefing.com consensus expected the CPI to increase 0.6%. Just like yesterday’s PPI report, the entire gain in inflation was due to higher energy and food prices. Energy costs jumped 5.6% and ended four consecutive months of declines. That was the largest increase in energy costs since June 2009. The bulk of the energy increase came from higher gasoline prices (+9.0%).
Food prices increased 0.2% in August after increasing 0.1% in July. The effects of the drought have not yet been accounted for in the food price index and are expected to drive prices significantly higher over the next few months. Excluding food and energy, core CPI increase 0.1% for the second consecutive month. The consensus expected these prices to increase 0.2%. Like July, there were no unusual outliers that affected the overall core inflation trends. Over the last year, core prices have increased 1.9% and have trended lower since peaking at 2.3% in March.
