U.S. CPI Strengthens in August; Core Price Rise Picks Up
- Energy price jump fuels increase while food prices rise modestly.
- Core goods prices slip, but services prices gain steadily.
- Used car prices fall but rents & medical care costs rise.
The Consumer Price Index rose 0.6% in August following two months of 0.2% increase. The rise matched expectations in the Action Economics Forecast Survey. The 3.7% y/y rise was increased from 3.2% in July, but remained below the 9.1% high in June 2022. Prices excluding food & energy rose 0.3% last month, also following two months of 0.2% increase. The 4.3% y/y increase was the lowest since September 2021 and down from a 6.6% high in September 2022.
Higher gasoline prices added strength to the overall CPI increase as they jumped 10.6%, following a 0.2% July increase. This was the heftiest monthly gain since March 2022. Gasoline prices remain down 3.3% y/y. Amongst other energy products, fuel oil prices rose 8.4% (-12.4% y/y) after a 3.7% rise. Showing moderate gain, electricity prices improved 0.2% (2.1% y/y) after a 0.7% July decline while natural gas prices ticked 0.1% higher (-16.5% y/y) following a 2.0% jump.
The CPI less food, energy and shelter, another measure of core pricing power, rose 0.3% during August after easing 0.1% in July. The 2.2% y/y increase remained below the 7.6% peak in February of last year.
Used car & truck prices fell 1.2% (-6.6% y/y) following a 1.3% July decline. The CPI excluding food, energy, shelter and used car & truck prices rose 0.4% following two months of no change. The 3.2% y/y rise remained well below the 6.7% high in September of last year.
Goods prices less food, energy and used car & trucks edged 0.1% higher last month (2.0% y/y) after falling 0.2% in July. Education & communication goods costs fell 0.7% (-8.1% y/y) after a 1.2% drop. Recreation product prices fell 0.4% (-0.1% y/y) following a 0.8% July decline. Home furnishings prices rose 0.3% (1.7% y/y) after falling for four straight months while appliance costs weakened 0.2% (+0.1% y/y) following a 0.5% increase. Apparel prices rose 0.2% (3.1% y/y) after holding steady in July and new vehicle prices rose 0.3% (2.9% y/y) after a 0.1% dip in July.
Service costs less energy in August increased 0.4% (5.9% y/y) for the fifth time in the last six months. Transportation service prices rose 2.0% (10.3% y/y) after a 0.3% rise. The cost of shelter rose 0.3% (7.3% y/y) after two months of 0.4% increase as owners’ equivalent rent of primary residences increased 0.4% (7.3% y/y), down from a 0.8% December high. Rents of primary residences rose 0.5% (7.8% y/y) after a 0.4% increase. Education & communication prices rose 0.1% (2.6% y/y) after a 0.3% increase. Recreation service prices slipped 0.1% (+6.1% y/y) after increasing 0.8%, but medical care service costs rose 0.1% (-2.1% y/y) after falling 0.4% in July.
Food prices rose 0.2% (4.3% y/y) in August for the second consecutive month. Egg prices fell 2.5% (-18.2% y/y), off for the seventh straight month. Meat, poultry & fish prices jumped 1.0% (1.6% y/y) after rising 0.7% in July, while cereal & bakery product prices gained 0.5% (6.0% y/y) after little change in the prior three months. Fruit & vegetable prices eased 0.2% (2.1% y/y) after rising 0.4% and dairy prices fell 0.4% (+0.3% y/y) after rising 0.5% in July. Nonalcoholic beverage prices slipped 0.2% (+4.8% y/y) after holding steady in July.
The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.
Tom MoellerAuthorMore in Author Profile »
Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.