US CPI outstrips forecasts in August as petrol prices spike

US consumer prices rose more quickly than expected last month on a spike in gasoline prices.

Headline CPI was up by 0.4% versus July and by 1.9% in comparison to the same month of one year ago, according to the Bureau of Labor Statistics.

Economists had projected a rise of 0.3% on the month and 1.8% over the year.

At the so-called 'core' level, CPI was ahead by 0.2% on the month yet the year-on-year rate of change was steady at 1.7% on the year (consensus: 1.6%).

The cost of services outside of energy was up by 0.4% on the month, driven by higher prices for shelter (0.5%) and transportation (0.4%). In comparison to a year earlier, they were up by 2.5%.

Core commodity prices on the other hand were again lower, dipping by 0.1% on the month and 0.9% in annualised terms.

Thursday's CPI release prompted Blerina Uruci at Barclays to tell clients: "For much of this summer, the question facing the Fed has been how much of the recent disinflation is transitory and how much will persist - in other words, where will the underlying rate of inflation settle? In our view, the August report should assuage concerns in some parts of the FOMC that the underlying rate of inflation has fallen too far. In light of this morning’s report, we maintain our view that a rate hike in December is more likely than not, but also point out that it remains dependent on the incoming date on labor markets, activity, and inflation."