Updated Sep 13, 2023 - Economy

Consumer Price Index rose in August as gas prices surged

Data: Labor Department; Chart: Axios Visuals

The Consumer Price Index accelerated in August as gasoline prices soared, though a closely watched measure of underlying inflation showed a more encouraging picture, the Labor Department said on Wednesday.

Why it matters: The report is one of the final inflation reads before the Federal Reserve's interest rate decision next week.

By the numbers: Overall CPI rose 3.7% in the 12 months through August, up from the 3.2% in July. The core gauge, which strips out food and energy prices, rose 4.3%, easing from the 4.7% the prior month.

  • On a monthly basis, overall CPI rose 0.6% — the quickest pace in more than a year. But core CPI rose 0.3%, slightly higher than the 0.2% pace seen in the prior two months.
  • The gasoline index rose almost 11% in August, up from the 0.2% increase in July.

The big picture: Fed officials are expected to hold interest rates steady as key inflation measures show encouraging signs of cooling.

  • The energy sector can be volatile month-to-month, so policymakers focus on the core measure for a better read on inflation pressures across the economy.
  • Prices for used cars and trucks continued to decline, dropping 1.2% in August after a similar decrease the prior month. Compared to the same time a year ago, prices are down nearly 7%.

Yes, but: Other items showed prices re-accelerating. Airline fares, for instance, rose 5% in August, after a streak of monthly declines.

Editor's note: This story was updated with a new chart and additional details through.

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