Consumer prices moved up sharply in August.
The consumer price index rose 0.4 percent compared with July, driven higher by rising gasoline prices, the Labor Department reported Friday. Over the year, the consumer price index is up 3.4 percent.
Core prices, a measure that excludes food and energy prices, rose 0.3 percent in August. Compared with a year ago, core prices are up 2.4 percent.
Economists had forecast CPI would increase by 0.4 percent from the prior month and 3.4 percent from a year ago. Core prices were expected to rise 0.2 percent for the month and 2.4 percent over the past 12 months.
The index for gasoline rose 3.9 percent in August, accounting for over one-third of the monthly all-items increase. Compared with a year ago, gasoline prices are up 27.4 percent.
Grocery prices were flat for the month and are up 2.2 percent from a year ago. Dining out prices rose 0.3 percent and are up 3.4 percent from a year ago.
The larger-than-expected increase in core prices is likely to convince investors that the Fed will raise interest rates when it meets next week.
Core goods prices, a measure which excludes food and energy, rose 0.1 percent. Compared with a year ago, they are up 0.7 percent. Prices of core services, a measure that excludes energy services, rose 0.3 percent and are up three percent for the year.
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