Consumer prices forecast increasing 0.6 in August
CPI expected to rise 3.6 yearonyear
Core CPI seen gaining 0.2; advancing 4.3 yearonyear

WASHINGTON, Sept 13 Reuters U.S. consumer prices likely increased by the most in 14 months in August amid a surge in the cost of gasoline, but an expected moderate rise in underlying inflation could encourage the Federal Reserve to keep interest rates on hold next Wednesday.

The consumer price report from the Labor Department on Wednesday will be published a week before the Fed39;s rate decision. It would follow on the heels of data this month showing an easing in labor market conditions in August.

Prices outside the volatile food and energy categories, the socalled core inflation, were likely tame for a third straight month, with the yearonyear increase forecast to have been the smallest in nearly two years.

It39;s going to be a mixed picture, with headline inflation picking due to higher gasoline prices and core inflation remaining contained, said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina. The Fed would be encouraged by the continued moderation trend in core inflation, but it39;s still too high.

The consumer price index likely increased by 0.6 last month, according to a Reuters survey of economists. That would be the largest gain since June 2022 and would follow two straight monthly advances of 0.2.

Gasoline prices accelerated in August, peaking at 3.984 per gallon in the third week of the…