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State and Nation Business

Consumer prices up

Back-to school fashions are displayed at JC Penney in New York.
Back-to school fashions are displayed at JC Penney in New York.

U.S consumer prices barely rose last month, the latest sign that slow economic growth is keeping inflation tame.

The consumer price index increased only 0.1 percent in August, the Labor Department said Tuesday, after a 0.2 percent increase in July. Excluding volatile food and energy costs, core prices also rose only 0.1 percent.

In the past 12 months, prices have risen 1.5 percent. That’s down from the 2 percent year-over-year gain in July and below the Federal Reserve’s 2 percent inflation target. Core prices are 1.8 percent higher than a year ago, the largest 12-month gain since March.

The increase in core prices could help persuade the Fed to start pulling back on its low interest rate policies. But significantly lower inflation would pressure the Fed to keep stimulating the economy.

Most economists expect that the Fed will begin to reduce its bond buying by about $10 billion on Wednesday.

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