* July annual inflation increased at slowest pace since late 2015
* Weekly jobless claims rise slightly
* Dollar General falls after quarterly results
* Campbell Soup lower after 2018 sales warning
* Indexes up: Dow 0.23 pct, S&P 0.27 pct, Nasdaq 0.33 pct (Updates to open)
By Sruthi Shankar and Tanya Agrawal
Aug 31 (Reuters) - Wall Street opened higher on Thursday after tepid inflation data raised expectations that Federal Reserve will hold off from increasing interest rates again this year.
The core personal consumption expenditures (PCE) price index - the Fed's preferred inflation measure - increased 1.4 percent in the 12 months through July, its smallest year-on-year increase since December 2015.
Core PCE has undershot the U.S. central bank's 2 percent target for the past five years.
Consumer spending increased 0.3 percent last month, below the 0.4 percent rise expected by economists.
Chances of a rate hike in December have fallen to about 36 percent, from 43 percent a month ago, according to CME Group's FedWatch tool.
Labor Department data showed the number of Americans filing for unemployment benefits rose slightly last week.
The weekly data precedes the more comprehensive monthly jobs report on Friday, which will help investors gauge the strength of the labor market as they look for clues on the Fed's next move on rates.
"We do anticipate the overall market reaction to remain reticent ahead of the jobs data due tomorrow," said Naeem Aslam, chief market analyst at Think Markets UK.
At 9:33 a.m. ET (1333 GMT), the Dow Jones Industrial Average was up 49.47 points, or 0.23 percent, at 21,941.9, the S&P 500 was up 6.72 points, or 0.27 percent, at 2,464.31.
The Nasdaq Composite was up 21.32 points, or 0.33 percent, at 6,389.63.
All 11 major S&P sectors were higher, with the health index's 0.55 percent rise leading the advancers.
UnitedHealth's 0.7 percent gain provided the biggest boost to the Dow, while Amazon helped boost the Nasdaq and the S&P.
U.S. crude prices are on track to post the steepest monthly losses in more than a year as concerns spread over falling demand after Harvey knocked out almost a quarter of U.S. refineries.
Investors are also worried about escalating tensions between the United States and North Korea after President Donald Trump dismissed any diplomatic negotiations in a tweet on Wednesday, a day after Pyongyang fired a ballistic missile.
Among stocks, Dollar General fell 5.6 percent after reporting a slide in second-quarter margins.
Campbell Soup was down 4.8 percent after the company warned that sales for fiscal 2018 could fall. Rival General Mills was down 1.77 percent.
Shoe Carnival surged 24 percent after the footwear retailer's revenue and profit beat estimates.
Advancing issues outnumbered decliners on the NYSE by 1,950 to 543. On the Nasdaq, 1,555 issues rose and 628 fell. (Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)