Investing.com - U.S. consumer prices rose less than expected in August, but still pointed to a steady increase in inflation pressures that should keep the Federal Reserve on track to gradually raise interest rates.
The Labor Department said on Thursday its consumer price index advanced 0.2%, missing expectations for a gain of 0.3%. The CPI rose 0.2% in July.
In the 12 months through July, the CPI increased 2.7%, below forecasts for a reading of 2.8% and down from 2.9% in July.
The U.S. central bank is widely expected to hike interest rates two more times this year, with the next move higher coming at its September 25-26 meeting.
Core CPI, a key gauge of underlying consumer price pressures that excludes food and energy costs, increased by 0.1% from a month earlier, below forecasts for a gain of 0.2%.
The annual increase in the so-called core CPI was 2.2%. Economists were looking for it to hold steady at July’s 2.4% advance.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure precisely because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.