US consumer prices unexpectedly rise in August

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Monthly US consumer prices unexpectedly rose in August as declining fuel prices were offset by gains in the costs of rent and food, giving cover for the Federal Reserve to deliver another hefty interest rate increase next Wednesday.

The consumer price index gained 0.1% last month after being unchanged in July, the Labor Department said on Tuesday. Economists polled by Reuters had forecast the CPI dipping 0.1%.

Overall inflation is slowing as goods prices retreat after surging earlier this year amid a loosening of bottlenecks in global supply chains and a shift in spending back to services. Fed officials gather for their regular policy meeting next Tuesday and Wednesday with inflation remaining way above the US central bank's 2% target. Fed Chair Jerome Powell reiterated last week that the central bank was"strongly committed" to fighting inflation.

The inflation report followed data last week showing continued labor market resilience. First-time applications for unemployment benefits are at a three-month low and job growth remains solid. There were two job openings for every unemployed person on the last day of July.

 

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