US and eurozone inflation rise in August Inflation in the US rose in August by the most in three years, with higher fuel costs accounting for around 80 percent of the increase. However there was little sign of a pick-up in underlying inflation pressures. That is good news for the Federal Reserve which has just announced more stimulus measures which do push up prices. US consumer prices increased 1.7 percent annually, up from July's 1.4 percent, but below the Fed's 2.0 percent target. At the same time it was announced that US retail sales were up in August, by 0.9 percent, which was more than forecast. However details of the report point to only a modest increase in consumer spending this quarter which means muted overall economic growth. Consumers are not in an expansive mood. Weakening consumption is probable in the months ahead," said Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey. "The retail sales and consumer price reports give the Federal Reserve very little reason to doubt their decision to increase monetary stimulus," said Kathy Lien, of BK Asset Management in New York. Other data also showed stresses in the US economy. Industrial production fell 1.2 percent in August, the most in over three years, partly as a result of shutdowns to oil and gas production facilities due to Hurricane Isaac. Energy drives eurozone inflation up Eurozone inflation - at 2.6 percent from a year ago - was higher for the first time in 11 months as the EU statistics office Eurostat confirming its earlier estimate. That is above the 2.0 percent that the European Central Bank aims for. Inflation was at 2.4 percent in May, June and July. Fuel and transport costs were the driving factor in August. Excluding energy and food, alcohol and tobacco, whose prices also rose sharply in the month, the annual inflation rate was 1.5 percent Transport prices were 4.8 percent higher in August than a year earlier, alcohol and tobacco prices were up 4.5 percent and housing was 4.1 percent more expensive. More about: Eurozone, Inflation, USA