(CN) – U.S. consumer prices increased by just 0.1% last month, the latest indication of low inflation and a sign the Federal Reserve is likely to cut interest rates again next week.
The consumer price index, a measure of inflation pressure that tracks changes in what Americans pay for a wide range of products, is up 1.7% from a year ago.
Gas prices dropped 3.5% in August after a 2.5% gain the month before, while rent went up 0.2% and medical care services rose 0.9%, according to a Labor Department report released Thursday.
Costs for clothing, used vehicles, and airfare were also up. Food prices were unchanged for the third consecutive month.
Overall energy prices dropped 1.9%, including a 0.3% decrease in electricity costs.
Excluding the always volatile food and energy categories, core consumer prices increased 0.3% in August and are up 2.4% from this time last year.
Inflation has consistently stayed below the Federal Reserve’s 2% annual target, as the U.S. economy marked a record 10 straight years of expansion in July.
The central bank is expected to cut rates again at its Sept. 18 meeting, and the move can’t come soon enough for President Donald Trump.
The Fed last lowered rates on July 31 for the first time since the start of the recession more than a decade ago, spurred by the low inflation, Trump’s trade war with China and global growth fears.
That quarter-point cut in the benchmark short-term rate, which influences consumer and business loans from mortgages to credit cards and home equity lines of credit, put it in a range of 2% to 2.25%.
President Trump on Wednesday called for the rate to drop to zero.
“The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet,” he tweeted.
Trump added, “The USA should always be paying the lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of ‘Boneheads.’”
On Wednesday, the Labor Department reported that the producer price index – which measures cost changes of products before they’re sold to the American public – also ticked up by only 0.1% in August after a 0.2% increase the month before.
Not counting food and energy, core wholesale prices rose 0.3% last month and are up 2.3% from a year ago.