August CPI Shows Sudden Inflation Surge: August CPI Shows Inflation Surge
Inflation took an unexpected leap in August as sharply higher energy prices and housing costs sent the consumer price index up 0.5 percent, the Bureau of Labor Statistics reported yesterday.</br></br>It was the largest increase in the price index since JanuaryÛªs 0.7 percent rise. Over the last eight months, consumer prices have gone up 5.1 percent on an annual basis. In 1986, the index rose 1.1 percent.</br></br>Analysts said it was unlikely that prices would spiral quickly upward during the rest of the year, but cautioned that the weak inflation rates of 1986 are gone. Prices in 1987 and 1988 are forecast to go up by 4 percent to 4.5 percent.</br></br>In another disappointing report, the Commerce Department said yesterday that new factory orders for durable goods, a gauge of future business investment, fell 3.1 percent last month. The decline was the first since January.</br></br>Orders for nondefense capital goods, a component of the durable-goods indicator that also predicts business spending, fell 8.4 percent in August from the previous month.