Ahead of the Bell: US Consumer Prices
WASHINGTON (AP) — More expensive gasoline likely drove up consumer prices last month for the first time since March, though overall inflation probably remained tame.
Economists forecast that the consumer price index jumped 0.6 percent last month, according to a survey by FactSet. That's up from a flat reading in July. Core prices, which exclude volatile food and energy costs, are expected to have increased 0.2 percent, up from 0.1 percent in July.
The Labor Department will release the report at 8:30 a.m. Eastern time Friday.
In the 12 months that ended in July, consumer prices rose 1.4 percent, the smallest increase in more than a year and a half. Core prices rose 2.1 percent over the same period.
Gas prices have jumped in recent weeks, limiting consumers' ability to spend on other items. The average price for a gallon of gas nationwide was $3.87 on Thursday, up 17 cents in the past month.
Food prices likely also rose, though economists expect the drought in the Midwest may not start pushing up grocery prices for another month or two.
Overall, mild inflation leaves consumers with more money to spend, which can boost economic growth. Lower inflation can also encourage the Federal Reserve stick with programs intended to rekindle the economy. If the Fed were worried that prices are rising too fast, it might have to raise interest rates.
On Thursday, the Federal Reserve said it would purchase $40 billion of mortgage-backed securities a month until the economy and the job market steadily improve. Fed officials also said they would keep short-term interest rates low even after the economic recovery accelerates.
Hiring has weakened recently after a strong start to the year. Employers added only 96,000 jobs in August, below the 141,000 added in July and far below the average gains of 226,000 in the first quarter.
The unemployment rate fell to 8.1 percent from 8.3 percent, but only because the number of people in the work force shrank.
For now, the economy isn't growing fast enough to spur greater job gains. The economy expanded at a 1.7 percent annual pace in the April-June quarter. That's down from 2 percent in the first quarter and 4.1 percent in the final three months of last year.