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 3.87%, up from 3.77% last month. Year-over year-Core CPI came in at 1.97%, which the BLS rounds to 2%, up from 1.95% last month.
Here are excerpts from the BLS summary:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.9 percent before seasonal adjustment.
Increases in energy and food indexes were the main cause of the seasonally adjusted all items increase. The gasoline index continued to rise, and indexes for electricity and natural gas increased as well. Broad increases in food indexes also continued in September, with the food at home index rising 0.6 percent for the third month in a row and no major grocery store food group indexes declining.
The index for all items less food and energy increased 0.1 percent in September, its smallest increase since March. The index for apparel declined in September after a series of sharp increases, and the indexes for used cars and recreation turned down as well. The indexes for new vehicles and household furnishings and operations were both flat. The shelter index rose, but posted its smallest increase since April, while the indexes for medical care, airline fares, and tobacco all increased. More…
The Briefing.com consensus forecast was for a month-over-month increase of 0.3%, on target with the 0.3% reported by the BLS. Core CPI month-over-month came in at 0.1%, which was lower than the 0.2% expectation.
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, like last month, at the top of the target range.
