<p>Monthly US consumer prices unexpectedly rose in August as declining gasoline prices were offset by gains in the costs of rent and food, giving cover for the Federal Reserve to deliver another hefty interest rate increase next Wednesday.</p>.<p>The consumer price index gained 0.1 per cent last month after being unchanged in July, the Labor Department said on Tuesday. Economists polled by Reuters had forecast the CPI dipping 0.1 per cent.</p>.<p>In the 12 months through August, the CPI increased 8.3 per cent. That was deceleration from the July's 8.5 per cent rise. The annual CPI peaked at 9.1 per cent in June, which was the biggest gain since November 1981.</p>.<p><strong>Read | <a href="https://www.deccanherald.com/business/economy-business/double-whammy-for-economy-inflation-rises-iip-growth-slows-1144439.html" target="_blank">Double whammy for economy: inflation rises, IIP growth slows</a></strong></p>.<p>Overall inflation is slowing as goods prices retreat after surging earlier this year amid a loosening of bottlenecks in global supply chains and a shift in spending back to services.</p>.<p>US gasoline prices have plunged from an average record high above $5 per gallon in June, according to data from AAA. They were averaging $3.707 per gallon on Tuesday.</p>.<p>Fed officials gather for their regular policy meeting next Tuesday and Wednesday with inflation remaining way above the US central bank's 2 per cent target. Fed Chair Jerome Powell reiterated last week that the central bank was "strongly committed" to fighting inflation.</p>.<p>Financial markets have almost priced in a 75 basis points rate increase next Wednesday, according to CME's FedWatch Tool. The Fed has twice hiked its policy rate by three-quarters of a percentage point, in June and July. Since March, it has lifted that rate from near zero to its current range of 2.25 per cent to 2.50 per cent.</p>.<p>The inflation report followed data last week showing continued labor market resilience. First-time applications for unemployment benefits are at a three-month low and job growth remains solid. There were two job openings for every unemployed person on the last day of July.</p>.<p>That is supporting strong wage gains, contributing to higher prices for services and keeping underlying inflation elevated.</p>.<p>Excluding the volatile food and energy components, the CPI rose 0.6 per cent in August after advancing 0.3 per cent in July. The so-called core CPI increased 6.3 per cent in the 12 months through August after rising 5.9 per cent in July.</p>
<p>Monthly US consumer prices unexpectedly rose in August as declining gasoline prices were offset by gains in the costs of rent and food, giving cover for the Federal Reserve to deliver another hefty interest rate increase next Wednesday.</p>.<p>The consumer price index gained 0.1 per cent last month after being unchanged in July, the Labor Department said on Tuesday. Economists polled by Reuters had forecast the CPI dipping 0.1 per cent.</p>.<p>In the 12 months through August, the CPI increased 8.3 per cent. That was deceleration from the July's 8.5 per cent rise. The annual CPI peaked at 9.1 per cent in June, which was the biggest gain since November 1981.</p>.<p><strong>Read | <a href="https://www.deccanherald.com/business/economy-business/double-whammy-for-economy-inflation-rises-iip-growth-slows-1144439.html" target="_blank">Double whammy for economy: inflation rises, IIP growth slows</a></strong></p>.<p>Overall inflation is slowing as goods prices retreat after surging earlier this year amid a loosening of bottlenecks in global supply chains and a shift in spending back to services.</p>.<p>US gasoline prices have plunged from an average record high above $5 per gallon in June, according to data from AAA. They were averaging $3.707 per gallon on Tuesday.</p>.<p>Fed officials gather for their regular policy meeting next Tuesday and Wednesday with inflation remaining way above the US central bank's 2 per cent target. Fed Chair Jerome Powell reiterated last week that the central bank was "strongly committed" to fighting inflation.</p>.<p>Financial markets have almost priced in a 75 basis points rate increase next Wednesday, according to CME's FedWatch Tool. The Fed has twice hiked its policy rate by three-quarters of a percentage point, in June and July. Since March, it has lifted that rate from near zero to its current range of 2.25 per cent to 2.50 per cent.</p>.<p>The inflation report followed data last week showing continued labor market resilience. First-time applications for unemployment benefits are at a three-month low and job growth remains solid. There were two job openings for every unemployed person on the last day of July.</p>.<p>That is supporting strong wage gains, contributing to higher prices for services and keeping underlying inflation elevated.</p>.<p>Excluding the volatile food and energy components, the CPI rose 0.6 per cent in August after advancing 0.3 per cent in July. The so-called core CPI increased 6.3 per cent in the 12 months through August after rising 5.9 per cent in July.</p>