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U.S. consumer prices increase solidly in August

FILE PHOTO: People shop at Macy's Department store in New York City, U.S., March 11, 2019. REUTERS/Brendan McDermid

WASHINGTON (Reuters) - U.S. consumer prices increased solidly in August, but labor market slack is likely to keep a lid on inflation as the economy recovers from the COVID-19 recession.

The Labor Department said on Friday its consumer price index rose 0.4% last month. The CPI advanced 0.6% in June and July after declining in the prior three months as business closures to slow the spread of the coronavirus depressed demand.

In the 12 months through August, the CPI increased 1.3% after gaining 1.0% in July. Economists polled by Reuters had forecast the CPI rising 0.3% in August and climbing 1.2% year-on-year.

Reporting by Lucia Mutikani; Editing by Alex Richardson

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