Inflation posted its biggest monthly increase of the year in August as consumers faced higher prices for the energy sector and various other goods.
The consumer price index, which measures costs across a wide range of goods and services, rose 0.6% for the month, and was up 3.7% from a year ago. Economists polled by Dow Jones had expected increases of 0.6% and 3.6%, respectively.
However, excluding volatile food and energy, core CPI rose 0.3% and 4.3%, respectively, compared to estimates of 0.2% and 4.3%. Federal Reserve officials focus more on the core because it provides a better indication of the direction of inflation over the long term.
Energy prices were the biggest contributors to the increase this time around, rising 5.6%, an increase that included a 10.6% jump in gasoline. Food prices rose 0.2% while protection costs, which make up about a third of the CPI weight, rose 0.3%.
The stock futures market initially fell following the report then bounced back for now. Treasury yields were higher overall.
The surge in inflation has hit workers' wages. Average real hourly earnings declined 0.5% for the month, although they were still up 0.5% from a year ago, the Labor Department said in a separate release.
The US dollar index which measures the US dollar currency against six major currencies traded down to a trading level of 104,294 after the CPI report was released.
