US Inflation Surges in August, Fueling Concerns for Consumers

US consumer prices rose by the most in 14 months in August, driven by a surge in gasoline prices. However, the annual increase in underlying inflation was the smallest in nearly two years, which may give the Federal Reserve reason to keep interest rates unchanged. The consumer price index (CPI) increased by 0.6% in August, in line with expectations. Gasoline prices accounted for more than half of the CPI increase. While annual inflation has picked up for the second consecutive month, it has come down from its peak in June. The cost of shelter continued to rise, but rents are moderating. Excluding food and energy, the core CPI increased by 0.3%.