Economy

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Annual CPI continues elevated at 5.3% in August, near the highest since August 2008. M/M CPI +0.3% lower than expected +0.4%. Core m/m +0.1% vs +0.3% exp. Transitory? lowest since Feb and +4.0% vs +4.2% y/y expected

Inflation

The better-than-feared numbers have tempered some of the anxiety about rising inflation pressures and will presumably provide the Fed some air to wait and data watch a little longer before any formal tapering. Prices of airline fares, used cars and trucks, and motor vehicle insurance all declined over the month while increases were seen in cost of gasoline, household furnishings and operations, food, and shelter. announcement.

US CPI August 2021

United States Inflation Rate

Highlights

  • CPI increased 0.3% month-over-month v consensus +0.4%
  • CPI increased 5.3% year-over-year, versus 5.4% in July,
  • Core CPI, which excludes food and energy, was up a tame 0.1% v consensus +0.3%).
  • Core CPI up 4.0% versus 4.3% in July.
  • The food index was up 0.4% month-over-month. Faster price increases were seen for food (3.7% vs 3.4%), namely food at home (3% vs 2.6%) and food away from home (4.7% vs 4.6%)
  • The energy index increased 2.0% month-over-month, driven by a 2.8% increase in the gasoline index. energy (25% vs 23.8%)
  • The index for used cars and trucks prices declined 1.5% month-over-month.
  • The transportation services index dropped 2.3% month-over-month, led by a 9.1% month-over-month decline in airline fares Slowdown seen in cost of used cars and trucks (31.9% percent vs 41.7% in July)new vehicles (7.6% vs 6.4%)and transportation services (4.6% vs 6.4%)
  • The shelter index was up 0.2%, with the owners' equivalent rent of residences index up 0.3%.inflation was steady for shelter (2.8%)and and apparel (4.2%)
  • Medical care services (1% vs 0.8%).

Food

United States Food Inflation

Housing

United States CPI Housing

Transportation

United States CPI Transportation

US Core CPI August 2021

United States Core Inflation Rate

  • Core CPI m/m, was up a tame 0.1% v consensus +0.3%
  • Core CPI y/y up 4.0% versus 4.3% in July.

US core consumer prices exclude volatile items such as food and energy, rose 4.0 percent from a year earlier in August 2021, its smallest increase since May and below market expectations of a 4.2 percent advance. The index rose 0.7 percent in April 2021, down from .09% which had been its largest monthly increase since April 1982.

The effects of the coronavirus pandemic are weighing on prices since in last year many businesses closed and lockdowns were imposed, denting economic activity.  A jump in commodities and material costs, coupled with supply constraints, are pushing producer prices up and some companies are passing those costs to clients

US Real Earnings August 2021

  • Real average hourly earnings for all employees increased 0.4 percent from July to August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.6 percent in average hourly earnings combined with an increase of 0.3 percent in the Consumer Price Index for All Urban Consumers (CPI-U)
  • Real average weekly earnings increased 0.3 percent over the month due to the change in real average hourly earnings combined with no change in the average workweek.
  • Real average hourly earnings decreased 0.9 percent, seasonally adjusted, from August 2020 to August 2021. The change in real average hourly earnings combined with no change in the average workweek resulted in a 0.9-percent decrease in real average weekly earnings over this period.

 US Real Earnings Sept 2021

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“I’m making more money...But I don’t see it because I’m paying more money for stuff now.” Low-wage workers are getting sharp raises. Inflation is eating them up. via Greg Ip WSJ

 

From the Traders Community News Desk

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