By Geoffrey Smith
biedexmarkets.com — The Federal Reserve’s preferred measure of inflation outran expectations again in August, keeping up the pressure on the central bank to continue tightening monetary policy.
The core price index for , which is a more accurate reflection of the actual spending patterns of U.S. consumers than the Consumer Price Index, rose 0.6% on the month, after rising only 0.1% in July. Analysts had expected an increase of 0.5%.
Stripping out food and energy, inflation rose to 4.9% on the year, from an upwardly-revised 4.7% in July.
rose more gently, by only 0.3%, owing largely to the steady decline in gasoline prices through the month, which led to overall energy prices falling 5.5% on the month. By contrast, food prices rose 0.8%, the Bureau of Economic Analysis said. As a result, the headline rate of fell to 6.2% from 6.4%.
Overall managed to stay fractionally ahead of inflation in the month, rising 0.4%, a rebound from a drop of 0.2% in July. That represented a downward revision from an original estimate of 0.1% gain. continued to grow at a steady pace of 0.3%, unchanged from July. Healthcare was the only sector outside transport to register a meaningful increase in spending, while spending continued to fall on durable goods such as furnishings and appliances.
Greg Daco, chief economist with EY, said via Twitter that the numbers represented a “more measured” dynamic than in previous months.