United States inflation just beat economists’ expectations last month

The cost of living in the U.S. rose more than projected in August on higher shelter and health-care prices, indicating that inflation continues to move closer to the Federal Reserve’s goal.

The National Bureau of Statistics has said the Consumer Price Index which measures inflation increased year-on-year from 17.1 per cent in July to 17.6 per cent in the month of August.

The consumer price gauge increased 1.1 per cent in the 12 months ended in August, after a 0.8 per cent year-over-year advance the prior month.

Economists had forecast the CPI nudging up 0.1 percent last month and rising 1.0 percent from a year ago.

Excluding volatile food and gasoline, so-called core inflation rose 0.3%, the biggest jump since February.

The annual rate of core consumer price growth also accelerated to 2.3 percent in August from 2.2 percent in the previous month. Prices for prescription medicine soared 1.3 per cent.

In July, the headline CPI advanced at a 0.8% year-on-year clip and were unchanged versus June. It rose 1.6 per cent in July from a year earlier.

“It is hard to imagine that it will turn out to be more than a one-off”, said Stephen Stanley, chief economist at Amherst Pierpont Securities, in a note to clients. The CPI and PCE price index diverge in part due to differences in coverage and weights assigned to healthcare and housing costs.

The producer price gauge is one of three monthly inflation reports released by the Labor Department, the other two being import costs and consumer prices.

Wholesale prices in the USA were little changed in August, held back by a second straight month of lower costs for food and fuel.

The report also showed that profit margins at machinery and equipment wholesalers dropped by a record 2.9 percent in August.

Energy prices were unchanged in August as lower gas prices were offset by higher costs of natural gas and electricity.

Americans also paid more for motor vehicle insurance and apparel. Shelter costs were up 3.4% compared with a year earlier and medical-care prices were up 4.9% on the year. Prices for tobacco also rose, but the cost of used cars and trucks fell for a sixth straight month.