Shutterstock

Lower gasoline prices in August helped to slow upward pressure on U.S. consumer prices, though an adjusted gauge shows inflation accelerating to the fastest in more than a year, a government report showed Thursday.

The Consumer Price Index for all items rose by 0.1% last month, with gasoline prices down about 3.5%, the Labor Department's Bureau of Labor Statistics said in a press release. 

But excluding food and energy items, whose prices can vary widely from month to month, the CPI rose by 0.3%, faster than the 0.2% clip projected by economists in a survey by the data provider FactSet.

That works out to a 2.4% increase over the past 12 months, matching July 2018 levels that were the highest in a decade. 

"Along with the indexes for medical care and shelter, the indexes for recreation, used cars and trucks and airline fares were among the indexes that increased in August," according to the bureau. 

It was the first time in more than two decades that the so-called core CPI has climbed by at least 0.3% for three straight months, according to David Berson, chief economist at the insurer Nationwide. 

Faster inflation could complicate the Federal Reserve's move to push U.S. interest rates lower to stimulate the economy; ordinarily, lower interest rates would lead to higher inflation.

While Berson said the Fed is likely to cut the official rate by 0.25 a percentage point at a meeting next week, from the current range between 2% and 2.25%, future increases may become "more difficult" if inflation keeps rising. 

"Accelerating inflation will make it less likely that the Fed will ease in the future," Berson said Thursday in an e-mail. 

Used auto prices rose by 1.1%, while medical care services increased by 0.9%. 

And Ian Shepherdson, chief economist at the forecasting firm Pantheon, wrote in a note to clients that consumer prices could see additional upward pressure in coming months due to higher tariffs on Chinese imports imposed or threatened by President Donald Trump as part of his battle to reduce the trade deficit with China.

Some of those increases took effect Sept. 1.

One takeaway from Thursday's report was that investors collectively might be underestimating the potential for a higher inflation rate, according to Shepherdson. 

"Core inflation is unlikely to fall and could easily rise further," he wrote.