The cost of living in the US rose more than forecast in August as consumers paid more for food, energy and housing.
The consumer-price index increased 0.4 per cent after a 0.5 per cent gain in July, figures from the Labor Department showed on Thursday in Washington. Economists projected a 0.2 per cent gain. The so-called core gauge, which excludes volatile food and fuel prices, climbed 0.2 per cent for a second month.
The rise in commodity prices earlier this year prompted companies such as Lowe’s Cos to pass on the higher costs at a time when Americans’ wages are stagnating. Last week, Federal Reserve Chairman Ben S Bernanke said inflation was likely to moderate as some price increases prove “transitory.”
“There has been more momentum in underlying inflation than many had expected,” Jeremy Lawson, a senior US economist at BNP Paribas in New York. Still, “inflation won’t be a constraint on Fed policy. The Fed will be focused on the real economy; they know inflation will be moderating.”
New York Manufacturing
A report by the Federal Reserve Bank of New York says manufacturing in the region contracted at a faster pace in September. The Federal Reserve Bank of New York’s general economic index dropped to minus 8.8, the weakest reading since November, from minus 7.7 in August. Readings less than zero signal companies in the so- called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut, are cutting back.
Stock-index futures pared gains after the figures. The contract on the Standard & Poor’s 500 Index expiring in December rose 0.2 per cent to 1,184.5 at 8:48 a.m. in New York after climbing 0.7 per cent earlier.
On Thursday’s consumer-price report also showed inflation- adjusted hourly wages fell 0.6 per cent in August, the most since July 2008, and were down 1.9 per cent from the same month a year ago. The forecast gain in consumer prices was based on the median of 84 economists in a Bloomberg survey, wherein estimates ranged from a decline of 0.2 per cent to a gain of 0.4 per cent.
