US inflation rose in August by the most in over a year as a pickup in prices at the gas pump exacerbated already strained household budgets.
The consumer price index increased 0.6% from the prior month, the most since inflation peaked at a four-decade high in June 2022. Gasoline costs accounted for over half of the advance, according to the report from the Bureau of Labor Statistics, and Americans also saw higher prices for essentials like car insurance and prescription drugs.
That makes the pain of the cost-of-living crisis that much worse. Energy costs rose broadly — including a 10.6% monthly increase in gasoline prices, which was the largest since March of last year. Utility costs increased as well. The report adds to concerns that the renewed momentum in the economy is reigniting price pressures. While Fed officials have been growing more optimistic they can tame inflation without a recession, a re-acceleration in price growth could prompt them to push interest rates even higher and risk sparking a downturn.
Shelter prices, which are the biggest services component and make up about a third of the overall CPI index, increased 0.3%, as a decline in the cost of hotel stays tempered higher rents. A moderation in housing costs is an essential feature for a sustained downward trend in core inflation.
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