Gasoline fuels consumer price rise in August.

The consumer price index (CPI) increased by 0.6% last month, the largest monthly gain since June 2022, and rose 3.7% from year-ago. Gasoline was the largest contributor to the monthly increase, accounting for over half of the rise. Gasoline prices surged 10.6% on the monthly basis, though they were still down 3.3% from last year. Food prices rose 0.2% from the previous month and were up 4.3% from last year. Excluding food and energy costs, the so-called core CPI increased 0.3% on a monthly basis and 4.3% annually.

Food at home (grocery) prices firmed 0.2% in August, which was down from a 0.3% rise in July, though that equated to a 3.0% annual increase. Food away from home (restaurant) prices rose 0.3% last month, up from a 0.2% increase in July, and topped year-ago by 6.5%.

Despite the stronger consumer inflation data, Fed fund futures reflect increased odds the Fed will embark on an extended pause for interest rates. Prices now imply around a 60% chance the Fed will keep interest rates at the current range through year-end.

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