U.S. consumer prices jumped by the most in more than a year in August, mostly riding higher on an increase in gasoline prices, the government said Wednesday. However, analysts say underlying price pressures were tame enough that the country’s central bank may not see the need to increase its benchmark interest rate at next week’s meeting.

The country’s consumer price index edged higher last month by 3.7% on an annualized basis, after a 3.2% increase in July, the Labor Department said. Prices were up six-tenths of a percentage point in August over July after increasing by 0.2% for two straight months.

Even with the higher prices, analysts said policymakers at the central bank, the Federal Reserve, could refrain from increasing their benchmark interest borrowing rate at next week’s meeting as they wait for further evidence of the country’s inflation track.

The Fed has raised the rate 11 times in the last year and a half to curb borrowing and spending to tame inflation, which reached a recent peak of 9.1% in June 2022. The Fed’s key borrowing rate courses through the U.S. economy, helping establish interest rates for business and consumer loans.

Greg McBride, the chief financial analyst at Bankrate.com, said in a statement, “The Federal Reserve is poised to hold interest rates steady at their meeting next week but there are still some concerns within this [consumer price] report — gasoline prices, motor vehicle insurance, maintenance and repair — that the Fed won’t dispel the idea of an additional interest rate hike before year-end.”

The key culprit in the August inflation increase was the rising price of gasoline for motorists at service stations, where prices peaked at nearly $4 a gallon (3.8 liters) in the third week of the month.

U.S. President Joe Biden, campaigning for reelection in 2024, took note of the economic trends in a statement, “Overall inflation has also fallen substantially over the last year, but I know last month’s increase in gas prices put a strain on family budgets.”

In national polling, Americans who are particularly conscious of their household expenses have given Biden poor marks for his handling of the economy. Biden in turn noted in his statement, “Unemployment has remained below 4% for 19 months in a row, the share of working-age Americans with a job is the highest in 20 years, and real wages are higher now than they were before the pandemic.”

The Federal Reserve attempts to adopt policies that keep the increase in U.S. consumer prices at an annualized rate of 2%.

With the rate currently higher than that, U.S. economic fortunes are certain to be a key factor in next year’s presidential contest, with Biden’s Republican opponents blaming him for higher inflation because of increased government spending that he supported. Biden said the money for infrastructure repairs helped create thousands of new jobs and was needed to fix deteriorating roads and bridges.

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