US consumer inflation in 7-month high at 0.4% in August as Harvey pushes up gas prices

US consumer prices are reported to have risen more than expected in August as a result of Hurricane Harvey, which shut down refineries along the Gulf coast and sent petrol prices sharply higher.

According to data from the Labour Department on Thursday and reports gleaned from Financial Times, the headline consumer price index rose 0.4 percent last month, the biggest one-month gain since January.

The advance helped push the year-on-year price increase to 1.9 percent, compared to the 1.7 percent pace recorded in July.

“Increases in the indexes for gasoline and shelter accounted for nearly all of the seasonally adjusted increase in the all items index,” the Labour Department was reported to have said.

The energy index rose 2.8 percent in August as the gasoline index increased 6.3 percent.

Inflation is a key factor that the US Federal Reserves looks at in setting its monetary policy, and persistently sluggish price gains in recent months have dampened expectations for further interest rate rises this year.

While the headline inflation figures came in above market estimates for a 0.3 per cent month-on-month increase and a 1.8 percent year-on-year rise, most expect the rise in energy costs to be temporary and questions will remain over whether inflation will hit the Federal Reserve’s 2 percent annual rate target.

Core CPI, which excludes food and energy, gained 0.2 percent month-over-month — in line with expectations.