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September 18, 2002 9:25 AM, EDT

U.S. consumer prices, led by rises in the prices for clothing, tobacco and energy, recorded in August the largest gain since April, the Department of Labor said Wednesday.

The CPI – which is a closely monitored indicator of inflation – rose 0.3% in August – higher than the 0.2% rise predicted by most observers and it followed 0.1% increases in both June and July. It was the largest increase since the CPI rose 0.5% in April.

The "core" CPI – which discounts volatile food and energy costs, rose 0.3% -- also the largest gain since April. In July, the core CPI rose 0.2%, Labor said.

So far this year, despite the one-month spike, consumer prices are not accelerating much faster than last year. The CPI was 1.8% higher in August than it was a year ago. Last year at this time, consumer prices were running 1.6% higher than they were during 2000.

Since the CPI has remained relatively stable, the Federal Reserve has been able to maintain interest rates at four-decade lows.

In a separate report, this one by the Commerce Department, said that the U.S. trade gap narrowed in July to $34.8 billion.

The value of imports fell 1% to $117.8 billion because of lower demand for televisions, appliances and other consumer goods. At the same time, U.S. exports rose 1.3% to $83.2 billion in July on spiking demand for U.S.-made vehicles.

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