Consumer prices post largest annual gain in a year

Consumer prices post largest annual gain in a year
© Greg Nash

Consumer prices in the United States rose in August, leading to the biggest annual gain in a year.

The consumer price index (CPI) excluding food and energy prices, or core CPI, increased 0.3 percent last month, accelerating for the third month in a row driven by health care, airline, recreation and used car and truck costs, according to Reuters

Core CPI increased 2.4 percent in the 12 months through August, the biggest annual gain since July 2018, the news agency reported.

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Economists had predicted the CPI would rise 0.2 percent in August and 2.3 percent on a year-to-year basis.

Health care costs rose 0.7 percent, the largest gain since August 2016. Voters have said in polls that health care is their top political concern, as some Democratic presidential candidates focus on health care policy plans. 

Nonetheless the Federal Reserve is expected to cut interest rates next week for its second meeting in a row because of concerns about slowing economic growth, in part over the U.S. trade dispute with China.

President TrumpDonald John TrumpTrump opens new line of impeachment attack for Democrats Bloomberg to spend 0M on anti-Trump ads in battleground states New witness claims first-hand account of Trump's push for Ukraine probes MORE has been pressuring the Fed to lower rates further citing other global central banks that are easing their monetary policies.

The Federal Reserve cut interest rates for the first time in a decade in July.