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Economy in Brief

U.S. CPI Increase Holds Steady Unexpectedly; Core Price Gain Moderates
by Tom Moeller  September 13, 2018

Moderation in consumer price inflation was broad-based during August. Consumer prices rose 0.2% (2.7% y/y) following a 0.2% July gain. A 0.3% increase had been expected in the Action Economics Forecast Survey. The CPI excluding food & energy inched 0.1% higher (2.2% y/y) following three consecutive months of 0.2% gain. A 0.2% rise had been expected.

Stability in last month's CPI increase occurred as goods prices excluding food & energy fell 0.3% (-0.2% y/y) after a 0.1% rise. The decline was paced by a 1.6% drop (-1.4% y/y) in apparel prices, the largest of four consecutive declines. Recreation goods prices fell 0.5% (-2.7% y/y) as video & audio product prices fell 1.1% (-12.8% y/y). That followed stability in July. New vehicle prices held steady (0.3% y/y) after three straight months of firm gain. Medical care product prices slipped 0.3% (+0.3% y/y) following a 1.1% shortfall. The cost of home furnishings eased slightly (-0.5% y/y) following a 0.5% rise. Appliance prices gained 0.3% (2.3% y/y) after a 1.5% jump.   

Nonenergy services price inflation moderated to 0.2% (3.0% y/y) after a 0.3% July gain. Transportation services increased 0.3% (3.9% y/y) after a 0.5% increase. Medical care prices slipped 0.2% (+1.9% y/y) after a 0.1% rise. Education & communications services prices rose 0.2% (1.6% y/y), the weakest increase in four months. Recreation services prices improved 0.1% (1.4% y/y), the same as in July. Both gains were down from 0.4% in the prior two months. Shelter prices rose a steady 0.3% (3.4% y/y) as the owners' equivalent rent of primary residences rose 0.3% (3.3% y/y), as it has for roughly a year. Rents also increased a steady 0.3% (3.4% y/y). 

Countering these measures of moderation was a 1.9% increase (10.2% y/y) in energy prices which followed a 0.5% decline. Gasoline prices jumped 3.0% (20.3% y/y) following a 0.6% dip. The cost of fuel oil rose 2.2% (30.9% y/y) after a 1.2% rise. Natural gas prices rose 0.9% (0.1% y/y) following a 0.5% decline. The cost of electricity rose 0.3% (-0.5% y/y) and reversed July's fall.

Food prices improved 0.1% in August (1.4% y/y), the same as during the prior month. Meat, poultry & fish prices rose 0.2% (0.3% y/y) after a 0.3% rise. Cereal & bakery product prices held steady (0.3% y/y) following a 0.2% dip. Egg prices declined 1.2% (+14.7% y/y) after a 0.2% easing and dairy product prices improved 0.1% (-0.0% y/y) following a 0.6% decline. Fruit & vegetable prices declined 0.3% (+0.9% y/y) after a 1.0% strengthening. Nonalchoholic  beverage prices rose 0.2% both m/m and y/y.  

The consumer price data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

The Fed's latest Beige Book covering regional economic conditions can be found here.

Consumer Price Index, All Urban Consumers (% chg) Aug Jul Jun Aug Y/Y 2017 2016 2015
Total 0.2 0.2 0.1 2.7 2.1 1.3 0.1
Total less Food & Energy 0.1 0.2 0.2 2.2 1.8 2.2 1.8
  Goods less Food & Energy -0.3 0.1 -0.0 -0.2 -0.7 -0.5 -0.5
  Services less Energy 0.2 0.3 0.2 3.0 2.7 3.1 2.6
 Food 0.1 0.1 0.2 1.4 0.9 0.3 1.9
 Energy 1.9 -0.5 -0.3 10.2 7.9 -6.6 -16.7
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