An inflation gauge closely tracked by the Federal Reserve accelerated in August, boosted mainly by higher gas prices. But measures of underlying inflation slowed in the latest sign that overall price pressures are still moderating.
Friday's report from the Commerce Department showed that prices rose 0.4% from July to August, up from just 0.2% the previous month.
Compared with a year earlier, prices rose 3.5% in August, up from 3.4% year-over-year increase in July. It was the second straight rise in the year-over-year figure, which has tumbled from its 7% peak in June 2022 but still exceeds the Fed’s 2% inflation target.
A sharp increase in gas costs drove the August price increase, just as it did in the more widely followed consumer price inflation figures that the government issued earlier this month.
But excluding the volatile food and gas categories, “core” inflation remained comparatively tame in August, evidence that it's continuing to cool, though more slowly than it had been earlier this year. Fed officials pay particular attention to core prices, which are considered a better gauge of where inflation might be headed.
Core prices rose just 0.1% from July to August, down from July's 0.2%. Compared with a year ago, core prices rose 3.9%, down from July's year-over-year increase of 4.2%.
