The Bloomberg consensus estimate is 0.2 percent. CPINow from the Cleveland Fed is 0.18 percent. 
Chart Notes
- ATRR is an index created by Philadelphia Fed economists in cooperation with the BLS. It includes both new and existing leases unlike flawed models based on new leases only.
- Rent is the BLS measure of non-owner occupied rent, the typical apartment lease. It’s called rent of primary residence.
- OER stands for Owners’ Equivalent Rent. It is the BLS measure of the rent someone would pay to rent their own house, unfurnished, without utilities.
Quarter-over-quarter ATRR fell from 1.11 percent to negative 0.18 percent. Given a lag of ~1 quarter, this will soon hit the CPI via OER and Rent.
I explained the above chart in Year-Over-Year Rent Inflation Is About to Fall Sharply
The quarter-over-quarter ATRR measures are more volatile than I like, but they are quickly mean-reverting. I suspect volatility is due to the NTR [New Tenant] component where confidence ranges improve over time.
Once again, note the lead time of ATRR over rent and OER of about one quarter. This is very useful.
My CPI Guess
A the risk of looking silly, I will guess 0.0 percent month-over-month with a decent chance of a negative print. I don’t rule out a small negative revision to last month.
I am basing my guess on improved reading in both Owners’ Equivalent Rent (OER) and energy.
All Tenant Regressed Rent Index vs CPI Rent Index 2024-Q2
NTR peaked three quarters ago. ATRR peaked one quarter ago. Together they suggest flat to slightly declining measures of rent and OER starting soon.
Is Now Too Soon?
I may be early by a month or two. But based on the above chart I would not all all be surprised to see OER come in at 0.1 percent or negative. Perhaps last month will be revised lower.
Gasoline prices are down by $0.17 from a month ago. That’s about 4.9 percent. We need to round that lower to 2.6 percent or so because the drop was gradual, not big bang.
I don’t have a good handle on food, but I expect energy will more than offset food on a contribution to net CPI basis.
CPI Year Over-Year
The Bloomberg consensus is 2.6. The low was 2.4 percent. I will go with the low.
This calculation is pretty easy. Take the year-over-year CPI, currently at 2.9 percent, subtract 0.5 percentage points (the monthly increase a year ago), then add the current month-over-month CPI rate.
Any reading 2.5 percent or lower (monthly reading 0.1 percent or lower) will increase the odds of a 50 basis point cut by the Fed this month. So would negative revisions.
Earlier today I noted Fed Beige Book Conditions Are Worse Now Than the Start of the Great Recession
Also note BLS Negative Job Revisions 15 of Last 21 Months
Well, I’m sure that’s nothing too.
I too expect a CPI print tomorrow that will be bullish for markets, if for no other reason that we’re replacing last August’s 0.5% MoM increase as you suggested.
As you are surely aware, fuel prices have been declining, but far more in the futures markets than at the pump.
Given that several food producers have warned that the consumer is pulling back and switching to store brands, I’d imagine that food prices will be tame as well.
Whether shelter prices finally show a flat reading or even a declining reading MoM is the open question.
Either way, I expecte MoM and YoY to improve and they will continue to do so in the months ahead.
If I’m not mistaken, PPI was 0.7% MoM last August and given the collapse in futures prices for oil, gas and diesel, I trust the PPI report will be rather bullish as well and will continue to do so in the months ahead.
On a YoY basis, prices are down considerably for oil, RBOB and ULSD.
That should bode well for the PPI and should help the CPI in the coming months.
Believe it or not, RBOB futures are trading at prices not seen since 1 to 2 months into the Biden administration.
ULSD and WTI futures are at lows not seen since November 2021 and brent crude is at lows not seen since March of last year.
All of this bodes well for the rate of inflation.
Negative rates are coming back !
Miss Special K needs a CPI print that is low so that they can brag and keep her in the Running. Thus, all of the Bullshit numbers NEED to be concocted lower to produce that 50 bp cut which will feed the engine of the Blue Party, while the Red Party runs out of booze.
Go to the stores.
Look at the prices for eggs, meat, cheese.
Figures the Government publishes don’t mean squat except to Government folks.
Who cares about the rate of increase slowing.
We already can’t afford what we need.
MMT (More Money Today).
Free Stuff for Everybody, all the time.
All concocted, all of the time and everyone hangs on every freaking word. It gets exhausting and then I pull out a Fine bottle of French Red, or Napa Chard and my sorrows dissolve into a found stupor.
For me, rent is by far the most costly expense. Groceries arent too bad and it’s surprising how low gas has gotten.
Just debating whether 0.2% or not is a good thing. But prices will not be going down. That’s not the Fed’s job, cackled Great Grandma Yellen a while back.
Great Great Grma Y, combined with Missy Special K and we have an alphabet soup of inanity. OH, I’m on fire today. HA HA!
As opposed to when prices do go down. Like, when is that?
Sincerely,
Your Fiat Currency
I am more concerned about the next wave of inflation after the Fed cuts. I think a better question is how long will it take after the Fed cut for inflation to spike. There are still 10k boomers retiring every day, that hasn’t stopped nor will it. Ever day till 2030.
I wonder if a Trump win will immediately cause a rush to stock up knowing Trumps tariff and anti-immigration stances (both highly inflationary) will spike prices.
In any event, it’s time to position for profits in a highly inflationary environment. Already have a few good prospects just in case.
Did Miss Special K also promise Tariffs? Did I miss something?
The current administration has brought inflation under control even with the current tariff scheme. Trump wants to raise the ante with regards to tariffs. Focus on the context not the politics and you won’t miss it.
U will get it after the Fed cuts rate allowing inflation to chew up debt. There are still 10k/day boomers retiring and Gen alpha is 30/40 millions short. Demand for highly skilled workers will rise. Tax collection will rise. Tariffs will rise ==> Trump/Vance will cut gov debt. The Dow will rock in the next 4/6 years !
NTR, ATRR and gasoline prices are down : that’s good news for Kamala. If Kamala builds 3 millions housing units ATRR will be more negative. Demand for highly skilled construction workers will be high. Not enough of them, construction delays. Delays cost money even with lower interest.
– If Kamala builds 3 millions housing units,
> So let’s do a quick back of the napkin, to see where Kam is at…
Hmm… today is September, and the election is held in November last I checked, so if Kam can build 3 Million Homes in slightly less than 2 months, she will be the next President!!
So she has that going for her!
Has Kam ever built a house before? Does she have all the Material set aside already? Are the laborers all lined up? How are the Unions doing with all this building going on around them? Are the Unions involved yet?
Oh, I almost forgot, did Hunter Approve This Yet? Kind of important, don’t you think, now that he runs Biden Inc.
So many questions, and so little time…
After reading your comment, my mind jumps to one word: “CIRCUS.”
You seem like a special one, what kind of careful handling do you require?
Truth and Trust
I’ll bite. Core services MoM is going to be 0.3% or higher.
Here are the last 12 readings of the CPI-W: 301.551, 302.257, 302.071, 301.224. 300.728, 302.201, 304.284, 306.502, 307.811, 308.163, 308.054, 308.501.
It has fallen four times in the last year and has basically been stagnant the last 3 readings. I predict it will fall below 308.501.
Yep. Gasoline prices are down. And I expect them to remain low for some time as demand for gasoline is flat to lower (due to more EVs and PHEVs, and better efficiency in ICE vehicles).
Diesel is down as well. From $4.37 a year ago to $3.70 today.
OT: In China, 7% of their transport trucks have already switched from diesel to Natural Gas and 1 in 3 new trucks sold are NG. NG fuel is cheaper and has lower emissions. And China is going big on NG for transport and EVs and PHEVs for personal vehicles. Perhaps we will see more of that in the US as well.
Back to the US, Natural gas prices have dropped from $9 to $2 over the last two years. Which is one reason I expect a lot of new electricity production to come from new NG plants.
Economies thrive on cheap energy. And low energy prices really help the US consumer. In 1983, US consumers spent 8.2% of their income on energy. Today, they spend just 4.2% of their income on energy.
You must study both the numerator and denominator.
Meanwhile: Federal regulators have given Venture Global LNG permission to begin preparations for the start-up of LNG equipment at its Plaquemines export plant in Louisiana.
Probably delayed for a few weeks until
hurricane Francine passes.
Once fully operational, it will increase US LNG export capacity significantly. The pipelines that will supply Plaquemines are up and running.
The US is already the world’s number 1 LNG exporter. Lots more to come.
Theft of American tax payers to continue in order to expand the control state and support wars.
My Medicare B increased 100%. Taking 20 % of my Social Security benefit.
Why? Told I made too much money prior year.
Bullshit!
It was year before I decided to throw in the towel and retire.
Work for who?
Happy in another country until my present country decides my money should be shared for those who did not toil 40 hour weeks for over 40 years.
Western societies are doomed for the sheep are sleep walking to their slaughtering.
We are spending half of our time in other Countries where life is surrounded by Blue waters, and Blue-haired Grandma’s all heading to the boneyard. This means that Villa Prices are gonna drop in 10 years, leaving fine lookin’ views for early-retired Gen-Xers. YEP!
It’s a bit dangerous politically. A low print is good for the stock market, but will result in a low-balling of the Social Security COL increase angering the recipients. Even more so if the rumors of big increase in Medicare Part B show up as well.
Last year the SS increase was 3.2%, but the tax brackets (also supposedly indexed to CPI) went up 5.4% So the elderly were screwed, and then Medicare part B went up too. I heard much howling from my mother about that.
After the Social Security COLA for 2025 is smaller than expected, the Fed interest rate cuts will wipe out the interest income retirees enjoyed in 2024 for the first time in many years. Of course all this will happen after the election.
I don’t know the number, but I can tell you one person who does: Kamala Harris.
Or at least her team. It’s been leaked to them and they’re modifying their talking points accordingly.
Now the trick is for Special K to be able to utter a complete sentence. I dunno about dat!
No worries, just make jokes and post memes through November, Trump has it in the bag.