U.S. Consumer Prices Rose 0.1% in August

U.S. consumer prices rose slowly in August, held down by weak energy prices that masked a broader firming in price pressures.

The consumer-price index, which measures what Americans pay for items from fresh whole milk to lawn-care services, rose a seasonally adjusted 0.1% in August from a month earlier, matching economists’ expectations.

The sluggish pace of overall price growth largely reflected a decline in energy prices. Core consumer prices, which exclude the volatile categories of food and energy, increased 0.3% from the previous month. This marked the third straight monthly rise of 0.3% and a pickup from earlier in 2019.

Prices for a wide array of goods and services rose last month. Rent and medical prices were among the drivers behind stronger inflation in August.

From a year earlier, consumer prices increased 1.7% in August and core consumer prices climbed 2.4%, the fastest annual pace since July 2018 when core prices also rose 2.4%.

Strengthening inflation helps reassure Federal Reserve policy makers, who have frequently expressed concern this year about weak inflation.

The Fed targets 2% inflation as measured by the personal-consumption-expenditures price index, a separate gauge that includes many components of the consumer-price index. The PCE price index has been running below the central bank’s target and rose 1.6% in July from a year earlier.

Policy makers see low inflation as a threat because it tends to weigh on interest rates, giving them less room to stimulate the economy in a downturn by reducing borrowing costs.

A separate report showed real average hourly earnings, a measure of inflation-adjusted earnings, increased 0.4% in August from a month earlier.