Prices Rise At Slowest Pace Since January

Prices were up in August, but it was the slowest increase since January, according to the latest Consumer Price Index release…(Bureau of Labor Statistics)

  • M-O-M: The Consumer Price Index increased 0.3% in August a dip from the 0.5% in July and the lowest monthly increase since January.
  • Y-O-Y: The all items index increased 5.3% in August which was 0.1% lower than July. This was the first drop 12-month drop since October 2020.

The core index saw an even smaller increase in August on a monthly and annual basis…

  • M-O-M: The core index saw a 0.1% increase in August a drop from 0.3% in July and the smallest increase since March.
  • Y-O-Y: The core index was up 4.0% which was down from the 4.3% in July and the lowest number since May.

Food prices were up 0.4% in August which was the smallest increase since May, but the year-over-year increase (+3.7%) was the biggest increase since February 2012.

  • Other important items include Shelter which was up 0.2% in August with a yearly increase of 2.7%, Energy was up 2.0% with a yearly increase of 25.0%, and apparel was up 0.4% with a yearly increase of 4.2%

Used cars & trucks saw their first decline since February with a 1.5% drop in August. Prices, though, were still up 31.9% year-over-year.

  • New vehicles prices were up 1.2% in August with a yearly increase of 7.6% and transportation services fell 2.3% for the month but are still up 4.3% year-over-year.

ANALYSIS: The August data was well received by economists, but definitely no football spiking just yet…

  • JOSEPH BRUSUELAS said its “Too soon to declare victory on this-its going to be a bumpy ride back to anywhere near 2%-but as the supply shock eases the Fed will likely get further relief going forward.” (Twitter)
  • NEIL IRWIN was pleased with the data but hopes it is not short lived. “The question now is whether the moderation in consumer price inflation will continue, or if supply constraints and inflation expectations already baked in (see PPI surge and NY Fed inflation expectations surveys) will create a second wave of price hikes.” (Twitter)