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US consumper prices spike in August on fuel, housing costs

[WASHINGTON] Rising fuel and shelter costs drove up US consumer prices in August, a sign inflation could be gaining pace after remaining stubbornly sluggish for months, according to government data released Thursday.

The new figures come the week before the Federal Reserve is due to review benchmark US interest rates and could boost the position of those who support a third rate increase this year, although that would be unlikely to happen before December.

The Consumer Price Index, which tracks the cost of household goods and services, jumped 0.4 per cent last month, its biggest increase since January and a tenth of a point higher than the consensus forecast.

The energy index rose 2.8 per cent, driven in large part by a 6.3 per cent jump in gasoline prices, while costs for shelter rose 0.5 per cent.

On a 12-month basis, the index rose 1.9 per cent over the same month in 2016, up from 1.7 per cent last month.

Officials said it was unclear how much Hurricane Harvey was responsible for rising fuel prices in the report, but the storm certainly interrupted the flow of survey responses from some areas in Texas.

Harvey made landfall in southeast Texas on August 26, causing much of US oil production and refining capacity to shut down, driving up prices in different regions of the country. But that information did not necessarily make it into the CPI report.

Excluding the volatile food and fuel categories, core CPI was up just 0.2 per cent, in line with analyst expectations.

The year-over-year core was steady at 1.7 per cent, where it has been for the past three months.