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CPI Rises Less Than Expected But Year-Over-Year Numbers Remain Elevated

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5 comments on CPI Rises Less Than Expected But Year-Over-Year Numbers Remain Elevated

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This morning the BLS released its CPI Report for August. 

Month-Over-Month Details 

  • The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in August on a seasonally adjusted basis after rising 0.5 percent in July.
  • The indexes for gasoline, household furnishings and operations, food, and shelter all rose in August and contributed to the monthly all items seasonally adjusted increase. 
  • The energy index increased 2.0 percent, mainly due to a 2.8-percent increase in the gasoline index. 
  • The index for food rose 0.4 percent, with the indexes for food at home and food away from home both increasing 0.4 percent. 
  • The index for all items less food and energy rose 0.1 percent in August, its smallest increase since February 2021. 
  • The indexes for household operations and shelter, the indexes for new vehicles, recreation, and medical care also rose in August. 
  • The indexes for airline fares, used cars and trucks, and motor vehicle insurance all declined over the month. 

CPI Year-Over-Year Percent Change 

Year-Over-Year Details 

  • The all items index rose 5.3 percent for the 12 months ending August, a smaller increase than the 5.4-percent rise for the period ending July. 
  • The index for all items less food and energy rose 4.0 percent over the last 12 months, also a smaller increase than the period ending July.
  • The energy index rose 25.0 percent over the last 12 months.
  • The food index increased 3.7 percent over the last 12 months.

Econoday Economist Expectations

  • The consensus opinion was for the CPI to rise 0.4% month-over-month vs. the reported 0.3%
  • The consensus opinion was for the Core CPI to rise 0.3% month-over-month vs. the reported 0.1%
  • The consensus opinion was for the CPI to rise 5.3% year-over-year vs. the reported 5.3%
  • The consensus opinion was for the Core CPI to rise 4.2% year-over-year vs. the reported 4.0%

The Real CPI

The CPI factoring in housing and medical is much greater than the reported CPI. I will publish an alternate CPI that factors in housing when the next Case-Shiller home price data is released. 

My last report had year-over-year CPI at 8.57%. For discussion, please see Housing Adjusted Real Interest Rates Sink to a Record Low -8.5 Percent.

Stay tuned.

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Mike Shedlock

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Carl_R
Carl_R
4 years ago
After this data, the Moore Inflation Predictor now has inflation staying at about this level through February, then falling to 3.5% by the end August 2022.
Again, this is just a mechanical computation of “baked in” inflation, not a prediction in the sense that they are speculating about the future.
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oee
oee
4 years ago
as the Fed would say, it is transitory.  I know there will be no more inflation talk when the Doomsayers start saying the govt is cooking books to show no more inflation. 
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Flatlaxity
Flatlaxity
4 years ago
Remember that goods/services inflation (CPI, PCE, etc.) is a lagging indicator, by about a calendar quarter or so.  Consumer intentions to spend, even though they’re currently rife with savings, government subsidies and real estate gains, are down considerably (according to the latest U. Mich. and Conference Board results.)  The relieving of the lower priced offshore merchandise bottled up in the west coast containerships should help to drive prices and domestic goods consumption, down.  I’m in the camp that both GDP and PCE inflation will decrease during the rest of the year and beyond.  The Fed, with its current tapering bent, may be caught flat-footed.
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Eddie_T
Eddie_T
4 years ago
Average nominal price appreciation of four modest single family homes in the Austin burbs over the last five years….18.75% as confirmed by appraisal this last week. (Range 16% to 22%).
Oh, wait, Mr Powell said those are assets….never mind.
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Eddie_T
Eddie_T
4 years ago
Reply to  Eddie_T
That’s per year. 
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