Little Sign of Inflation in Government Report

Washington, DC, Sept. 16, 2009--Consumer prices increased 0.4 percent in August, bolstering the Federal Reserve’s view that inflation will be contained.

The gain in the consumer price index was larger than forecast and followed no change in July, the Labor Department said today in Washington. Excluding food and energy costs, the so-called core index increased 0.1 percent, matching expectations.

Economists forecast consumer prices would rise 0.3 percent. Estimates ranged from a decline of 0.1 percent to a gain of 0.6 percent.

Compared with a year earlier, prices were down 1.5 percent.

For the core index, prices were up 1.4 percent from a year earlier, the smallest gain since February 2004.

The increase in the cost of living reflected a 4.6 percent increase in energy prices in August. Gasoline climbed 9.1 percent.

Rents, which make up almost 40 percent of the core CPI, were little changed. Owners-equivalent rent, one of the categories used to track rental prices, climbed 0.1 percent following no change in July.