U.S. Consumer Prices Up Just 0.1 Percent

WASHINGTON (AFP) - US consumer prices rose a modest 0.1 percent in August, in another sign that inflation was in check.

The core rate of the consumer price index (CPI), excluding food and energy, also rose 0.1 percent.

Private economists had been predicting a two percent rise in both figures.

The CPI, the most widely used gauge of inflation at the consumer level, has risen 0.1 percent in each of the past three months.

Over the first eight months of the year, prices were up 3.7 percent, but just 2.2 percent when the volatile food and energy components are removed.

Over the past 12 months, prices have risen 2.7 percent, with the core inflation rate at 1.7 percent.

Energy costs fell 0.3 percent in August after dropping 1.9 percent in July.

Within the energy sector, gasoline prices fell 1.4 percent. Fuel oil costs rose 5.2 percent, the smallest increase since January.

Food prices rose 0.1 percent in August after rising 0.3 percent in the previous month.

Within the core rate, an increase in rent payments was largely offset by declines in apparel, recreation and lodging away from home.

Apparel prices fell 0.2 percent in August after dropping 0.8 percent in July. Recreation prices fell 0.2 percent for the second straight month. And airline fares fell 3.7 percent in August, the largest decline since June 1999.

Hospital costs fell a record 0.4 percent in August.