Consumer prices fell for the first time in nearly 18 months in August, driven by a sharp plunge in gasoline, which offset food and rental prices, the government said on Wednesday. Labor Department data showed the Consumer Price Index declined 0.2 percent last month - the first drop since April last year. Economists polled by Reuters had forecast consumer prices being flat in August. The CPI increased 1.7 percent in the 12 months through August after rising 2.0 percent in July. Inflation has cooled somewhat after accelerating in the second quarter. Stripping out food and energy prices, the so-called core CPI was unchanged last month for the first time since October 2010. Energy prices fell for a second straight month, with gasoline plunging 4.1 percent. But food prices rose 0.2 percent as the effects of a drought in California linger and rents also increased 0.2 percent. August saw a second straight month of sharp declines in airline fares as well as apparel and used car prices and recreation prices recorded their largest drop since December 2009.
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