Inflation in August was stronger than expected despite the Federal Reserve's efforts to lower prices, according to data on Friday.
The price index of personal consumption expenditures excluding food and energy rose 0.6% for the month after being unchanged in July.
This reading was faster than the Dow Jones estimate of 0.5% and another indication that inflation is running rampant.
On a year-over-year basis, the core PCE reading rose 4.9%, more than the 4.7% estimate and up from 4.7% in the previous month. Including gas and energy, PCE rose 0.3% in August, compared with a 0.1% decline in July.
It rose despite a sharp drop in gas prices that took costs at the pump well below a nominal record of more than $5 a gallon earlier in the summer.
The Fed generally prefers core PCE as the broadest indicator of where prices are headed and adjusts it to consumer behavior. Data released today from the Department of Commerce show inflation is running well above the central bank's long-term target of 2%.
This reading of inflation raised many concerns and gave an indication that an increase in interest rates may be inevitable.
