US economy

US consumer prices increase less than expected in August


An escalating trade war between the United States and China is expected to keep inflation high. President Donald Trump last week threatened duties on another $267 billion worth of Chinese goods on top of a $200 billion tariff list that is awaiting his decision. Washington has already slapped duties on $50 billion worth of Chinese imports, provoking retaliation from Beijing.

The Fed is expected to raise interest rates at its Sept. 25-26 policy meeting. It has raised rates twice this year.

Minutes of the central bank’s July 31Aug. 1 meeting published last month showed “several participants commented that increases in the prices of particular goods, such as those induced by the tariff increases, would likely be one source of short-term upward pressure on the inflation rate.”

Last month, gasoline prices rebounded 3.0 percent after dropping 0.6 percent in July. Food prices edged up 0.1 percent, matching July’s rise. Food consumed at home was unchanged.

Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.3 percent in August after advancing by the same margin in the prior month. The rent index shot up 0.4 percent.

Healthcare costs decreased 0.2 percent last month, matching July’s drop, as prices for doctor and hospital services fell. Apparel prices tumbled 1.6 percent, declining for a third straight month. Prices for new motor vehicles were unchanged last month and the cost of used cars and trucks increased for a third consecutive month.



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