Consumer Prices Increase in August

Consumer prices in August posted their biggest increase in four months, especially hitting the wallets of energy users, clothing shoppers and smokers.

The consumer price index the closely watched inflation gauge, rose 0.3% in August from the previous month, the Labor Department reported. The advance followed a tiny 0.1% rise in July.

The latest reading on inflation was slightly worse than the 0.2% increase many analysts were predicting, but it did not alarm economists, who believe that the weak economy will make it difficult for companies to raise prices.

The core rate of inflation, which excludes energy and food prices, rose 0.3% in August, following a 0.2% increase in July. Energy prices rose 0.6% and food prices declined 0.1%.