WASHINGTON (AP) — U.S. consumer prices rose 0.4% in August as used car prices surged by the largest amount in 51 years.
The Labor Department reported Friday that the August increase in the consumer price index reflected some moderation following big gains of 0.6% in both June and July as the pace of energy price gains slowed.
However, there were still areas which showed bigger price increases, led by a 5.4% jump in used car prices, the biggest monthly gain since March 1969. New car prices were unchanged in August but analysts predicted prices there likely to rise in coming months, reflecting supply shortages. Motor vehicle production closed completely during the spring as the pandemic shut down wide swaths of the economy.
Other big gains were seen in household furnishings which jumped 0.9%, the largest monthly increase since February 1991, with the prices of furniture, bedding and appliances all showing big gains.
Still, even with the recent gains, inflation increases over the past year are modest. Overall inflation is up 1.3% while core inflation, which excludes energy and food, is up 1.7%.
“Consumer inflation has been accelerating as economic activity has resumed and these readings bear watching for further acceleration even though the trend remains subdued against a backdrop of weak demand and excess capacity,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
The slowdown in overall inflation in August after bigger gains in June and July reflected moderation in energy costs, which were up 0.9% last month following gains of 5.1% in June and 2.5% in July. The cost of gasoline was up 2% in August but is 16.7% lower than a year ago.