US consumer price inflation slowed in August, rising just 0.3 per cent compared to July, while the annual rate eased to 5.3 per cent, according to government data released on Tuesday.

Rising petrol prices remain a key driver of the consumer price index (CPI), but excluding volatile food and energy prices, “core” CPI rose just 0.1 per cent – its smallest increase since February, the Labour Department reported.

Over the past 12 months, core CPI rose four per cent, three-tenths slower than the yearly jump in July.

The gains in the month were slower than economists had expected, and the easing of price pressures supports the Federal Reserve’s argument that much of the recent inflation spike is due to temporary factors that will fade as the world’s largest economy rights itself following the COVID-19 shock.

The easing of price pressures supports the Federal Reserve’s argument that much of the recent inflation spike is due to temporary factors that will fade as the world’s largest economy rights itself following the COVID-19 shock

After plunging as the pandemic began and travel ground to a halt, oil prices have surged as Americans returned to the roads and skies, and petrol prices jumped 2.8 per cent in August, seasonally adjusted, the third consecutive monthly increase. They have spiked 42.7 per cent over the past year, the report said.

Prices for used cars and airfares actually fell in the month, while new car prices rose but more slowly. Food prices continue to rise, though also at a slower pace, with beef prices up 12.2 per cent over the past year, the data showed.