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US core annual inflation accelerates ahead of Fed meeting next week

U.S. annual core inflation climbed to 2.4% year over year in August from 2.2% recorded in the prior month, data from the U.S. Bureau of Labor Statistics showed.

The consensus estimate of economists polled by Econoday was for an annual core inflation rate of 2.3% in August.

On a monthly basis, the core inflation, which excludes food and energy, came in at 0.3% in August, unchanged from the prior month.

Indexes for medical care and shelter, recreation, used cars and trucks, and airline fares, among others, rose while those for new vehicles and household furnishings and operations declined month over month.

The broader U.S. consumer price index accelerated 1.7% year over year in August, in line with the Econoday consensus estimate but slower than July's growth rate of 1.8%. Energy prices declined 4.4% on a yearly basis, while food prices climbed 1.7%.

On a monthly basis, the consumer price index ticked up 0.1% in August from 0.3% in the previous month, primarily due to increases registered in indexes for shelter and medical care that outweighed a decline in the energy index.

The U.S. Federal Reserve targets 2% annual inflation.

The data comes a day after U.S. President Donald Trump asked the Federal Reserve to cut interest rates to zero percent or lower as the central bank prepares to hold its two-day monetary policy meeting next week.