CPI DROPS IN AUGUST

Check out the Bureau of Labor Statistics CPI Report here.

From USA Today:

Consumer prices in August fell for the first time in 10 months as another big drop in energy costs offset higher food prices.

The Labor Department reported Wednesday that its closely watched consumer price index dipped 0.1% last month, slightly better than the flat reading that had been expected. It was the first decline in consumer prices since a 0.4% fall in October.

Overall inflation through August is rising at an annual rate of 3.7%, up from a 2.5% increase for all of 2006.

n addition to higher food costs, consumers have also been hit by surging energy prices, which are up 12.7% at an annual rate this year, even with the declines in the past three months. Analysts are worried that further price increases are in the pipeline given the fact that oil prices have now surged to record levels above $80 a barrel.

Core inflation, which the Fed closely monitors, is better behaved this year, rising at an annual rate of 2.3% through August, down from an increase of 2.6% for all of 2006.

The price of medical care continued to surge, rising 0.5% in August. Medical costs are up 4.5% over the past year.