SeekingAlpha.com:
Consumer prices heated up again in August, as the prices of gasoline and housing contributed to the Consumer Price Index. For the month, the measure increased 0.6%, the same as the 0.6% expected and surging from +0.2% prior.
On a year-over-year basis, the CPI rose 3.7%, outpacing the 3.6% consensus, and accelerating from 3.2% in July.
The price of gasoline was the biggest contributor to the month’s increase, as expected, accounting for more than half of the rise. The energy index rose 5.6% in the month and the food index increased 0.2%.
Housing also added to the upward pressure on inflation. The shelter index rose for the 40th straight month, the U.S. Bureau of Labor Statistics said Wednesday.
Core CPI, which excludes volatile food and energy prices, increased 0.3% during the month, exceeding the 0.2% rise expected and compared with +0.2% prior. +4.3% Y/Y vs. +4.3% expected and +4.7% prior.
SA Investing Group Leader Lawrence Fuller points to the slowing Y/Y pace of core CPI as evidence of “the disinflationary trend that began last summer. The fact that shelter costs continue to be the largest contributor to the increase in the core rate is encouraging, because we know that new rental rates, where price increases are negligible, will bring that number down meaningfully in the year ahead. The Fed’s rate-hike cycle most assuredly ended in July.”
The segments that contributed to the monthly increase in core CPI included rent, owners’ equivalent rent, motor vehicle insurance, medical care and personal care. Indexes for lodging away from home, used cars and trucks, and recreation declined in August, the BLS said.
The food index increased 4.3% over the last 12 months, while the energy index declined 3.6%.
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