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August Consumer Prices Post Biggest Jump Since 2009

Rapidly rising gasoline prices accounted for most of the increase


Consumers’ wallets were lighter last month as prices increased, driven by gasoline price hikes.

The Labor Department announced on Friday that its Consumer Price Index (CPI) rose 0.6% in August, the largest rise since June 2009, but in line with economists’ expectations, Bloomberg noted.

Gas Prices Hit $8 in Jersey, Pennsylvania
Gas Prices Hit $8 in Jersey, Pennsylvania

Most of that increase — 80% — was attributed to a sharp rise in gasoline prices last month. The price of energy gained 5.6% compared to July, driven by a 9% jump in gas prices, and fuel oil which climbed by 4.6%. Food prices edged up just 0.2% from July.

Excluding food and fuel costs, the “core” CPI inched up just 0.1%. That was lower than the 0.2% increase forecast by economists.

Adjusting for price changes, Americans’ hourly earnings dipped 0.7% last month. That, too, was the largest decline since June 2009. Real wages remained flat compared to the same time last year.

Overall, consumer prices have increased 1.7%, and the core CPI has jumped 1.9%, during the year ending in August.

Yesterday, the government released its Producer Price Index (PPI), showing that wholesale prices rose 1.7% last month, higher than the 1.2% gain anticipated by economists. The rise in producer prices was also the biggest jump in three years.

Article printed from InvestorPlace Media,

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