Consumer prices down 1.5% in past year

NEW YORK (CNNMoney.com) — A key index of consumer prices rose in August, but sank significantly over the past 12 months, the government said Wednesday.

The Consumer Price Index, the Labor Department’s key measure of inflation, rose 0.4% in August on a monthly basis. Economists surveyed by Briefing.com expected a 0.3% increase.

Overall CPI has declined 1.5% over the past 12 months.

In the near term, “inflation is not the story,” said PNC analyst Robert Dye “We’re still focused on making sure we emerge from this recession with reasonable momentum.”

The government report attributed the month-to-month increase to the gasoline index, which rose 9.1% in August. That jump accounted for more than 80% of the overall CPI increase.

Despite August’s increase, the gasoline index has fallen 30% over the past year. That’s due to record-high gas prices in summer 2008, which reached a peak of $4.114 per gallon on July 17.

CNN