Courtesy of Doug Short.
The Bureau of Labor Statistics released the CPI data for August this morning. Year-over-year Headline CPI came in at 3.77%, which the BLS rounds to 3.8%, up from 3.63% last month. Year-over year-Core CPI came in at 1.95%, which the BLS rounds to 2%, up from 1.77% last month.
Here are excerpts from the BLS summary:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.
The seasonally adjusted increase in the all items index was broad- based, with continuing increases in the indexes for gasoline, food, shelter, and apparel. The gasoline index rose for the 12th time in the last 14 months and led to a 1.2 percent increase in the energy index, while the food index rose 0.5 percent, its largest increase since March.
The index for all items less food and energy increased 0.2 percent in August, the same increase as the previous month. Shelter and apparel were the biggest contributors, though the indexes for most of its major components posted increases, including used cars and trucks, medical care, household furnishings and operations, recreation, tobacco, and personal care. The new vehicles index, unchanged for the second month in a row, was an exception. More…
The Briefing.com consensus forecast was for a month-over-month increase of 0.2%, well below the 0.4% reported by the BLS.
The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since 1957. The second chart gives a close-up of the two since 2000.
On this chart, I’ve highlighted the 1.75% – 2% range, which is generally understood to be the Fed’s target for core inflation. Here we see more easily see the widening spread between headline and core CPI since late 2010, although the headline rate of change has moderated over the past few months.
Both year-over-year headline and core inflation are up. Federal Reserve policy, which focuses on core CPI and especially the core Personal Consumption Expenditures (PCE), will see the latest core CPI at the target range.
