A highly anticipated report released by the Labor Department on Tuesday showed a modest increase in U.S. consumer prices in the month of August.
The Labor Department said its consumer price index rose by 0.3 percent in August after climbing by 0.5 percent in July. Economists had expected consumer prices to increase by 0.4 percent.
The consumer price growth was partly due to another sharp increase in energy prices, which spiked by 2.0 percent in August after jumping by 1.6 percent in July. Gasoline prices led the way higher, soaring by 2.8 percent.
Excluding food and energy prices, core consumer prices inched up by just 0.1 percent in August after rising by 0.3 percent in July. Economists had been expecting another 0.3 percent increase.
Higher prices for household operations and shelter contributed to the uptick in core prices, which reflected the smallest increase since February.
A 9.1 nosedive in prices for airline fares limited the upside for core prices along with lower prices for used cars and trucks and motor vehicle insurance.
The report also showed a slowdown in the annual rate of consumer price growth, which dipped to 5.3 percent in August from 5.4 percent in July.
The annual rate of core consumer price growth also slowed to 4.0 percent in August from 4.3 percent in the previous month.
"We believe the annual rate peaked in June as the strong base effects are subsiding and wholesale price increases for used car and trucks have moderated greatly," said Kathy Bostjancic, Chief U.S. Financial Economist at Oxford Economics.
She added, "That said, price increases stemming from the ongoing supply chain bottlenecks amid strong demand will keep the rate of inflation elevated and sticky as supply/demand imbalances are only gradually resolved."
A separate report released by the Labor Department last Friday showed producer prices increased by slightly more than expected in the month of August.
The Labor Department said its producer price index for final demand climbed by 0.7 percent in August after jumping by 1.0 percent for two straight months. Economists had expected producer prices to increase by 0.6 percent.
Excluding prices for food, energy and trade services, core producer prices rose by 0.3 percent in August following a 0.9 percent advance in July. Core prices were expected to rise by 0.4 percent.
With another monthly increase, the annual rate of growth in producer prices accelerated to 8.3 percent in August from 7.8 percent in July, reflecting the largest advance since 12-month data were first calculated in November 2010.
The annual rate of growth in core producer prices also ticked up to 6.3 percent in August from 6.1 percent in July, showing the largest year-over-year increase since data were first calculated in August 2014.