US consumer prices fall 0.2 percent in August, first drop in 16 months, as energy costs dip

U.S. consumer prices edged down in August, the first monthly drop since the spring of 2013, as gasoline, airline tickets and clothing prices all fell. It was the latest evidence that inflation remains under control.

The Labor Department says consumer prices edged down 0.2 percent last month following a tiny 0.1 percent gain in July. It was the first decline since a similar 0.2 percent drop in April 2013. Core prices, which exclude energy and food, were unchanged in August, the first time there hasn't been an increase since October 2010.

Over the past 12 months, overall prices and core prices are both up a modest 1.7 percent. These gains are well within the 2 percent annual increase for inflation that the Federal Reserve considers optimal.