NEW YORK (
) -- Consumer prices rose 0.3% on a seasonally adjusted basis for the second time in August, driven by higher energy and food prices, the Bureau of Labor Statistics reported early Friday.
The increase in the Consumer Price Index was higher than the 0.2% projected by economists, according to estimates from Briefing.com. But the core rate of inflation -- a more relevant measure as it excludes volatile food and energy prices -- remained unchanged in August, after rising for three months.
Higher prices both at the producer and consumer level have helped abate concerns about deflation. The producers' price index, released on Thursday, showed a higher-than-expected rise of 0.4% in August, fueled again by higher energy prices.
"The PPI really took some of the deflation risk off the table for the short term, with energy prices rising after four months of decreases," Linda Bakhshian of Federated Investors told
on Thursday. "Over the long term, the deflation outlook is still cautious because of low interest rates and higher deficit spending," she said.
Speaking ahead of the CPI data she said that inflation was not a worry in the short-term. "Consumers are still strained. Wage growth is tame. Companies are unable to pass on price hikes," she argued.
Energy prices rose for the second straight month at the consumer level. All energy-related items posted increases, with gasoline prices being the main driver rising 3.9% in August. The food index, which declined in July, rose in August. Prices of apparel saw a 0.1% decline, while the price of new vehicles increased 0.3%.
Stock futures were rising after the inflation report.P/>-- Written by Shanthi Venkataraman
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