ALLENTOWN, Pa. — Gasoline pushed consumer prices up faster in August. Friday’s federal inflation report landed as Lehigh Valley drivers were paying about 40 cents a gallon more than a month ago.
The Consumer Price Index rose 0.4 percent from July to August on a seasonally adjusted basis, up from 0.1 percent in July, the U.S. Bureau of Labor Statistics reported Friday. Prices were 3.4 percent higher than a year earlier, the same annual rate as in July.
The report is the last inflation reading before the Federal Reserve meets Sept. 15-16. At least one Fed governor has said publicly that the August figures will weigh heavily on whether he backs a rate hike.
The gasoline index rose 3.9 percent in August and made up more than a third of the overall monthly increase, the bureau said. Gasoline was 27.4 percent higher than a year ago, and the broader energy index was up 16.3 percent.
The fuel oil index climbed 10.1 percent in a month and 52 percent over the year. Electricity fell 0.2 percent for the month, and utility natural gas fell 1.1 percent.
Core prices, which exclude food and energy, rose 0.3 percent from July, up from 0.2 percent the month before. Over 12 months, core inflation eased to 2.4 percent from 2.5 percent. Shelter costs rose 0.3 percent after 0.1 percent in July. Grocery prices were flat.
AAA’s Pennsylvania gas price page put regular in the Allentown-Bethlehem-Easton metro at an average of $4.38 a gallon Friday. That is up from $3.97 a month ago and $3.24 a year ago, a 35 percent increase in 12 months.
The Valley average was below the statewide figure of $4.48 and above the national average of $4.30. Diesel in the metro averaged $6.15. AAA listed Friday’s national diesel average, about $6.06, as the highest it has recorded.
The bureau measures prices for the Philadelphia-Camden-Wilmington area every two months. Its historical table now carries August: prices there were 4.2 percent higher than a year earlier, above the national 3.4 percent. That is down from 5.4 percent annually in June.
That area does not include Lehigh or Northampton counties, and the bureau warns that local indexes carry more sampling error than the national figure.
Fed Gov. Christopher Waller said in remarks Sept. 3 that his decision “will be heavily influenced by what we learn about August inflation.” If there is continued progress toward the Fed’s 2 percent goal, he said, he would support holding rates steady.
“But if inflation comes in hot, I would consider a rate hike,” Waller said, adding that “it may not take much acceleration in inflation” to move him. He said he would focus on core inflation because energy prices are volatile, and that “my earlier worry that higher energy prices would bleed into many goods and services prices hasn’t come to pass, at least so far.”
Before the release, some Wall Street analysts expected the Fed to raise rates if the monthly core figure rounded up to 0.3 percent, The Associated Press reported. The bureau’s figure was 0.3 percent.
The AP also reported that Fed Chair Kevin Warsh suggested in a speech two weeks ago that he leaned toward a hike, without committing to a date. Investors put the odds of a hike next week at about 70 percent, according to CME FedWatch figures cited by the AP.
Mortgage rates have been climbing. Freddie Mac’s weekly survey put the average 30-year fixed rate at 6.76 percent as of Sept. 10, up from 6.71 percent a week earlier and 6.35 percent a year ago.
Brent crude, the international oil benchmark, neared $110 a barrel overnight, then fell 3 percent to $104.42 Friday morning, the AP reported.
The September CPI is due Oct. 14.