The Consumer Price Index rose 5.3 percent compared with a year ago, the Department of Labor said Tuesday. On a monthly basis, the CPI rose 0.3 percent.
That continues the trend seen since January as the U.S. economy has been wracked by soaring prices and ongoing supply disruptions. But the resurgence of coronavirus infections has slowed parts of the economy, relieving s0me of the inflationary pressure.
Economists had forecast a 5.3 percent annual gain and 0.4 percent compared with the prior month.
The major stock indexes turned sharply higher on the news, presumably because the slightly lower-than-expected monthly inflation number is seen as relieving some of the pressure on the Federal Reserve to begin tapering its bond purchases at its monetary policy this month. Many economists now expect the Fed will hold off until its November meeting to formally announce a reduction in bond purchases.
Despite repeated assurances from Federal Reserve officials that they can contain inflation and that the current bout of rising prices is only transitory, the public increasingly expects more inflation.
The indexes for gasoline, household furnishings and operations, food, and shelter climbed higher in August.
Excluding food and energy, prices rose just 0.1 percent for the month. Compared with a year ago, core inflation was up 4.0 percent. Both were below the consensus forecast.
Food prices rose 0.4 percent from July to August and were up 3.7 percent compared with a year ago. Gasoline rose 2.8 percent for the month and is up 42.7 percent from a year ago, when prices were extremely depressed.
New vehicle prices rose 1.2 percent in August and are up 7.6 percent from a year ago. Used vehicle prices dipped 1.5 percent but remain 31.9 percent above the year ago level.