U.S. Consumer Prices Rise 0.3% In August, Slightly Less Than Expected

(RTTNews) - The Commerce Department released a closely watched report on Wednesday showing consumer prices in the U.S. rose by slightly less than expected in the month of August.

The Commerce Department said its personal consumption expenditures (PCE) price index increased by 0.3 percent in August following a revised 0.1 percent uptick in July.

Economists had expected prices to climb by 0.4 percent compared to the 0.2 percent increase originally reported for the previous month.

The report also said the annual rate of growth by the PCE price index came in at 3.4 percent in August, unchanged from a revised reading in July.

The annual rate of growth was expected to remain unchanged compared to the 3.7 percent growth originally reported for the previous month.

Excluding food and energy prices, the core PCE price index rose by 0.2 percent in August after inching up by a revised 0.1 percent in July.

Economists had expected core prices to rise by 0.3 percent compared to the 0.2 percent increase originally reported for the previous month.

The annual rate of growth by the core PCE price index came in at 3.0 percent in August, unchanged from a revised reading in July.

Economists had expected the annual rate of growth to remain unchanged compared to the 3.3 percent growth originally reported for the previous month.

"The August PCE inflation report was mixed," said Bill Adams, Chief U.S. Economist, Fifth Third Commercial Bank. "Inflation was stable on the month, but the trend was revised lower."

"Inflation is a little closer to target than in the prior release, but that is because of how inflation is measured, not how it's trending," he added. "You don't need your glasses on to tell the difference between 3% core PCE inflation and a 2% target."

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income increased by 0.2 percent in August after rising by a revised 0.3 percent in July.

Economists had expected personal income to climb by 0.5 percent compared to the 0.4 percent increase originally reported for the previous month.

The Commerce Department said personal spending jumped by 0.9 percent in August after edging up by a revised 0.1 percent in July.

Personal spending was expected to grow by 0.8 percent compared to the 0.2 percent uptick originally reported for the previous month.