Prices paid by American households declined in August as cheaper gasoline helped keep inflation below the objective of Federal Reserve policy makers. The consumer-price index dropped 0.1 percent, the first decline since January, after rising 0.1 percent in July, Labor Department figures showed Wednesday. The so-called core measure, which strips out often-volatile fuel and food costs, rose 0.1 percent for a second month. Goods prices declined, while services barely rose. A 15 percent plunge in energy costs over the past 12 months and a rising dollar are acting as a brake on inflation that the Fed views as temporary. Central bankers, who conclude a two-day meeting on Thursday, will have to weigh restrained prices, uneasy financial markets and a resilient U.S. labor market as they consider raising interest rates. “The Fed is certainly not hitting its inflation goal,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, said before the report. “These numbers could temporarily go even further away from the Fed’s goal.” At the same time, “it’s reasonable to predict that the effect of the dollar and oil prices will fade over the course of the next two years,” he said. Estimates in the Bloomberg survey for the CPI ranged from a decline of 0.2 percent to a gain of 0.3 percent.
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