U.S. consumer prices fall for first time in 16 months
WASHINGTON (MarketWatch) - U.S. consumer prices fell in August for the first time in 16 months, largely because of a decline in the cost of filling up at the gas station, the government reported Wednesday. The consumer price index dropped a seasonally adjusted 0.2% last month, the Labor Department said Wednesday. Economists surveyed by MarketWatch had expected the CPI to be flat. Energy costs fell 2.6% amid declines in gasoline and natural gas. Food prices rose 0.2%, however. Excluding the volatile food and energy categories, consumer prices were unchanged. Consumer prices have risen an unadjusted 1.7% over the past 12 months, down from a recent peak of 2% in July. The receding rate of inflation means the Federal Reserve is likely to stick to its current course of slowly reducing stimulus for the economy. The drop in inflation also gave households a short-term boost by stretching how far their paychecks will go. Real or inflation-adjusted hourly wages jumped 0.4% last month to mark the biggest gain since late 2012. Still, real wages are up a scant 0.4% in the past 12 months.
