Consumer prices rose 0.2% in August as annual inflation rate hits lowest since early 2021
Source: CNBC
Published Wed, Sep 11 2024 8:32 AM EDT Updated 11 Min Ago
Prices increased as expected in August while the annual inflation rate declined to its lowest level since February 2021, according to a Labor Department report Wednesday that sets the stage for an expected quarter percentage point rate cut from the Federal Reserve in a week.
The consumer price index, a broad measure of goods and services costs across the U.S. economy, increased 0.2% for the month, in line with the Dow Jones consensus, the Bureau of Labor Statistics reported. That put the 12-month inflation rate at 2.5%, down 0.4 percentage point from the July level and compared to the estimate for 2.6%.
However, core CPI, which excludes volatile food and energy prices, increased 0.3% for the month, slightly higher than the 0.2% estimate. The 12-month core inflation rate was 3.2%, in line with the forecast.
While the numbers showed that inflation slowly continued to moderate, housing-related costs remain an issue. The shelter component of CPI, which has about a one-third weighting in the index, increased 0.5%, accounting for much of the increase in the all-items measure. The shelter index was up 5.2% year over year.
Read more: https://www.cnbc.com/2024/09/11/cpi-inflation-report-august-2024-.html
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CPI for all items rises 0.2% in August; shelter up https://bls.gov/news.release/cpi.nr0.htm
#CPI #BLSdata
8:31 AM · Sep 11, 2024
Article updated.
Previous articles/headline -
Published Wed, Sep 11 2024 8:32 AM EDT Updated 8 Min Ago
Prices increased as expected in August while the annual inflation rate declined to its lowest level since February 2021, according to a Labor Department report Wednesday that sets the stage for a Federal Reserve interest rate cut in a week.
The consumer price index, a broad measure of goods and services costs across the U.S. economy, increased 0.2% for the month, in line with the Dow Jones consensus.
That put the 12-month inflation rate at 2.5%, down 0.4 percentage point from the July level and compared to the estimate for 2.6%.
However, so-called core CPI, which excludes volatile food and energy prices, increased 0.3% for the month, slightly higher than the 0.2% estimate. The 12-month core inflation rate was 3.2%, in line with the forecast.
This is breaking news. Please check back for updates.
Prices increased as expected in August while the annual inflation rate declined to its lowest level since February 2021, according to a Labor Department report Wednesday that sets the stage for a Federal Reserve interest rate cut in a week.
The consumer price index, a broad measure of goods and services costs across the U.S. economy, increased 0.2% for the month, in line with the Dow Jones consensus.
That put the 12-month inflation rate at 2.5%, down 0.4 percentage point from the July level and compared to the estimate for 2.6%.
Excluding volatile food and energy prices, so-called core CPI increased 0.3% for the month, equating to a 3.2% 12-month inflation rate. The respective estimates were for 0.2% and 3.2%.
This is breaking news. Please check back for updates.
Original article -
The consumer price index was expected to increase 0.2% in August and 2.6% from a year ago, according to the Dow Jones consensus estimate.
This is breaking news. Please check back for updates.
= new reply since forum marked as read
The inflation situation as of the release of the CPI on 9/11/24. Here is a summary table followed by the graphs.
I annualize them all to be easy to compare to each other, and to compare to the FED's 2% goal. I use the actual index values rather than the one-digit changes that are commonly reported in the media. Links to the data are with the graphs.
ALL the numbers are the seasonally adjusted ones
The "1 month" number is the change from June to July expressed as an annualized number. Except the CPI (today's report) is the increase from July to August, also annualized.
The "3 month" number is the growth over the last 3 months (and then annualized). It is calculated based on the change in the index number between the latest one and the one 3 months previous. e.g. if the latest index value is 304 and the one 3 months previous is 300, then the 3 month increase is 1.333333%
. . . (304/300 = 1.01333333 => [subtract 1 and multiply by 100%] => 1.333333%)
Annualized, it is 5.4%
. . . (1.01333333^4 = 1.0544095 => [subtract 1 and multiply by 100%] => 5.44095% => 5.4%).
. . . Most people just multiply the 3 month increase by 4 to annualize it: 1.333333%*4 = 5.333333% => 5.3% which isn''t technically correct (it leaves out compounding) but it is close for small percentage changes.
"Regular" is the "headline" number that has "everything"
"Core" is the regular with food and energy removed (The Fed prefers this as a basis for projecting FUTURE inflation)
Finally, the main summary table
All are seasonally adjusted and ANNUALIZED
PCE-Personal Consumption Expenditures Price Index (Fed's favorite inflation measure)
CPI-Consumer Price Index (retail)
PPI-Producer Price Index (Wholesale prices)
Links to the data are with the graphs below
. . ^^----- this is the discrepancy I mentioned in my title line
Average real (i.e. inflation-adjusted) hourly earnings are up over the past 2 years and are above the pre-pandemic level:
. . . # Real average hourly earnings of production and non-supervisory workers: https://data.bls.gov/timeseries/CES0500000032
. . . # Real average hourly earnings of private sector workers: https://data.bls.gov/timeseries/CES0500000013
And now the graphs, in the following order:
* Core CPI and Regular CPI
* Core PCE and Regular PCE (Core PCE is the Fed's favorite for projecting FUTURE inflation)
* Wholesale inflation - Core PPI and Regular PPI
CORE CPI through August that came out 9/11/24
CORE CPI (seasonally adjusted) http://data.bls.gov/timeseries/CUSR0000SA0L1E
BLS CPI news release: https://www.bls.gov/news.release/cpi.nr0.htm
The Regular aka Headline CPI through August that came out 9/11/24 (CPI=Consumer Price Index)
Regular CPI (seasonally adjusted) https://data.bls.gov/timeseries/CUSR0000SA0
BLS CPI news release: https://www.bls.gov/news.release/cpi.nr0.htm
Some Additional CPI Series of Interest
Shelter, which is pretty much all rent -- either regular rent or "owners' equivalent rent", has been a problematic issue -- because changes in new rents take several months before they appreciably move the CPI (because of the inertia of 11 months of older rents). It is the largest component of the Core CPI and one of the largest of the regular CPI. Through August, shelter remained elevated at 0.4% month over month for several months, except for a smaller 0.2% increase in June., and a larger 0.5% increase in August. Year-over-year, shelter is up 5.2%
Shelter: https://data.bls.gov/timeseries/CUSR0000SAH1
Core Inflation less Shelter: https://data.bls.gov/timeseries/CUSR0000SA0L12E
^--This is up 0.0% for 3 months in a row, followed by +0.1% in August. The 3 month annualized average is +0.0% (compare to core of +2.1%)
Click on "More Formatting Options" on the upper right hand of screen, and on the page that appears, choose some or all of: "1-Month Percent Change", "3-Month Percent Change" and "12-Month Percent Change".
Headline CPI and Fed Rate Action
November 2019 through August 2024
The first tentative little quarter point rate increase was March 17, 2022, 12 months after year-over-year inflation went north of 2% in March 2021, and had reached 8.5%.
I'm fond of the 3 month averages as they are an average of 3 data points (so can't be easily dismissed as a "one off", unlike a single month-over-month figure), and they have much more recency than 12 month averages (yoy). I think of them as kinda a smoothed version of month-to-month.
FedFunds Target Rate (I used the upper end of the 0.25% width bracket): https://www.federalreserve.gov/monetarypolicy/openmarket.htm
CORE PCE through JULY that came out 8/30/24 (PCE=Personal Consumption Expenditures price index)
CORE PCE (seasonally adjusted): https://fred.stlouisfed.org/series/PCEPILFE
BEA.gov News release: https://www.bea.gov/ and click on "Personal Income and Outlays" or "Personal Income"
This is the one that the Fed weighs most heavily. The Fed weigh the PCE more heavily than the CPI. And in both cases, they weigh the CORE measures higher than the regular headline measures for projecting FUTURE inflation
Regular PCE through JULY that came out 8/30/24
Regular PCE (seasonally adjusted): https://fred.stlouisfed.org/series/PCEPI
BEA.gov News release: https://www.bea.gov/ and click on "Personal Income and Outlays" or "Personal Income"
WHOLESALE INFLATION (PPI - the Producer Price Index)
https://www.bls.gov/news.release/ppi.nr0.htm
As for which core PPI measure, since the BLS highlights the one below (without food, energy, and trade services) in its reporting (as opposed to the one without food and energy), then I guess I should do likewise. Trade services bounce around a lot from month to month, so I think excluding them from a core measure is the right thing to do.
CORE PPI (excluding food, energy, trade services) through July that came out 8/13/24:
CORE PPI (seasonally adjusted) http://data.bls.gov/timeseries/WPSFD49116
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Regular PPI through July that came out 8/13/24 ( includes "everything" ):
Regular PPI (seasonally adjusted) http://data.bls.gov/timeseries/WPSFD4
as data got ingested and digested for eventual display. 
You've no doubt noticed that I found discrepancies between the BLS's cpi.nr0.htm summary, and their timeseries numbers for 12-month numbers (and I've dug into that, and even though the cpi.nr0.htm summary uses seasonally adjusted numbers, there is one exception: the 12-month numbers, which in their narration say are not seasonally adjusted. Well the time series for the 12-month NOT Seasonally Adjusted agree -- 2.5% for the headline CPI and 3.2% for the Core CPI. (The corresponding number for the Seasonally Adjusted numbers are 2.6% and 3.3%)
I have long noticed their narration mentions the 12 month numbers are not seasonally adjusted, and I've often wondered why since all their other numbers in the narration are seasonally adjusted. I assumed SA and NSA were the same on a 12 month basis, so I've shrugged my shoulders in the past, and have never found a difference in my spreadsheet calculations and graphs which are all SA -- I always check the 12 month numbers of the narrative with my spreadsheet, and they've always been the same. Until today.
Takeaway for now: #1 for some reason they aren't consistent in their narration: using SA numbers throughout except for the 12 month numbers. Why, I don' t know.
#2 The SA and NSA numbers aren't the same on a 12 month basis but have always rounded to the same number on a tenth of a percent rounding basis, up to now.
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I also extended my 36 month rolling average graph to 48 month rolling average graph to include some pre-pandemic months, and it was messier work than I had expected. Besides having to extend my data backwards a year, Excel and I weren't getting along, and I was thinking Excel was stealing and eating people's pets or something (Felonious' answer to everything he doesn't have an answer to).
I've never posted either my rolling 36 month or 48 month graph -- I do it for my own amusement. Basically it's a rolling average of the past 4 years covering a span of 8 years. Here it is, through August 2024.
and it's easier to leave it like that since, as you apparently discovered, it probably "rounded " to come out about the same values for NSA vs SA (which would probably correspond to a "regular cycling" of data throughout a typical year - EXCEPT if something weird happens during a particular month or months). It's possible too that they might "normalize" that raw NSA data too, to smooth out any one-off anomalous months, and that allows for looking at any trending.
And yeah, Excel can be quirky at times... I miss the old Quattro Pro.
right at the beginning first few seconds of the video
Or so "they" say
I've seen a number of stories like this. Your YOY graph's core inflation ("less food and energy" ) doesn't look that "sticky". Edit: well YOY does have a slight upturn in the last month, from 3.21% to 3.27% using seasonally adjusted 6-digit index numbers for the calculation and from 3.17% to 3.20% using NOT seasonally adjusted 6-digit index numbers)
My 3 month rolling average and especially my month-to-month does have an upturn -- a severe one in the month-over-month version, albeit from an almost zero level in June:
Producer Price Index 8:30 AM ET today, 6 1/2 hours from now
but then that includes the volatile "energy" component and gasoline prices have been dropping since August as the driving season is about over and some markets begin the switch to "winter blend" gasoline. But without that, you do see that little uptick and it could be the housing.
I have seen a myriad of articles about the mortgage rates continuing to drop but then sales prices for homes have still been holding (or even increasing in some markets due to a lack of housing stock and housing starts have decreased the past couple months per the Census Bureau).
I actually like this little chart - the below one from the Aug. 16 report (it has a y-o-y of housing starts but mainly like it because it also has a plot that goes back to July 2019) -
