U.S. CPI Increase Remains Modest in August

The Consumer Price Index increased 0.2% during August, the same as in July. The gain matched expectations in the Action Economics Forecast Survey. The y/y increase fell to 2.5% from 2.9% in July, and remained below the peak 9.1% y/y increase in June of 2022. The three-month increase edged up to 1.1% (AR) from 0.4% but remained below the 4.6% April high. Prices excluding food & energy rose 0.3% last month after rising 0.2% in July and 0.1% in June. A 0.2% rise had been expected. Core consumer prices increased 2.1% (AR) during the last three months, up 3.2% y/y.

The CPI less food, energy and shelter, another measure of core pricing power, edged 0.1% higher after three months of stability. The 1.6% y/y rise remained below the 7.6% y/y peak in February 2022 and compared to a low of 1.2% y/y in February 2021.

Services costs less energy rose 0.4% in August (4.9% y/y) following a 0.3% July gain and a 0.1% rise in June. Shelter costs rose 0.5% (5.2% y/y) following a 0.4% rise in July. The Bureau of Labor Statistics indicated that shelter was the main factor in the overall CPI increase. Owners’ equivalent rent of primary residences increased 0.5% (5.4% y/y), following a 0.4% rise. Rents of primary residences moved 0.4% higher (5.0% y/y) after a 0.5% gain while the cost of lodging away from home jumped 1.8% both m/m and y/y after a 0.2% rise.

Transportation service prices increased 0.9% (7.9% y/y) following a 0.4% rise. Education & communication prices rose a steady 0.2% (2.3% y/y). Recreation services prices held steady (3.2% y/y) following a 0.4% strengthening and medical care service costs eased 0.1% (+3.2% y/y) after a 0.3% decline.

During August, the CPI for goods less food & energy dropped 0.2% (-1.9% y/y) after falling 0.3% in July. The index has fallen or held steady in all but one month during the last year. Transportation product prices fell 0.3% (-4.4% y/y) after falling in each of the prior five months. New vehicle prices were unchanged (-1.2% y/y) after six straight months of decline while used car & truck prices dropped 1.0% (-10.4% y/y) after falling 2.3% in July. Prices for recreation products weakened 0.2% (-0.9% y/y) after falling 0.3%. To the upside, apparel costs rose 0.3% both m/m and y/y after falling 0.4% in July. Home furnishings prices weakened 0.3% (-2.6% y/y) last month after rising 0.1% in July, but appliance costs held steady (-3.2% y/y) after three consecutive months of strong increase. Education & communication product costs fell 0.4% (-5.9% y/y) and reversed the July increase. Medical care product prices declined 0.2% (2.0% y/y) in August after two 0.2% gains.

Food prices edged 0.1% higher (2.1% y/y) in August following two months of 0.2% increase. Egg prices jumped 4.8% (28.1% y/y), the third straight month of strong increase. Meat, poultry & fish prices rose 0.5% (1.6% y/y) after rising 0.3% while cereal & bakery product prices slipped 0.1% (-0.3% y/y), off for the third consecutive month. Fruit & vegetable prices slipped 0.2% (-0.2% y/y) after rising 0.8%, while dairy prices improved 0.5% (0.4% y/y) after falling 0.2% in July. Nonalcoholic beverage prices declined 0.7% (+1.3% y/y) after rising 0.5% in July.

Energy prices declined 0.8% (-4.0% y/y) in August after holding steady in July. Gasoline prices fell 0.6% (-10.3% y/y) after an unchanged July reading. Amongst other energy products, fuel oil prices weakened 1.9% (-12.1% y/y) after rising 0.9% in July. Electricity prices fell 0.7% (+3.9% y/y) after gaining 0.1%, while natural gas prices weakened 1.9% (-0.1% y/y) after falling 0.7% in July.

The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.