Announced this morning, the Consumer Price Index (CPI) increased 0.4% in August, as expected and was three-tenths higher than the previous month’s increase. On an annual basis, it grew 3.4%, the same as the previous month. The core rate, which excludes prices for food and energy, increased 0.3% in August, slightly higher than expected, and grew 2.4% on an annual basis, which is slightly less than the previous month’s annual increase.
Looking at the individual categories, monthly prices for Fuel Oil, up 10.1%, and Gasoline, up 3.9%, were relatively strong, while monthly prices for Utility (piped) gas service, down -1.1%, were relatively weak. Prices for Shelter were up 0.3% in August, higher than the previous month’s increase.
Overall, a slightly elevated report on inflation, with monthly headline CPI increasing as expected, but more than the previous month and the core measure increased just above expectations. Prices for fuel oil and gasoline grew in August, which was offset somewhat by prices for natural gas. The increase in oil prices is a reflection of the ongoing tension with Iran and its effect on energy markets. Meanwhile, prices for shelter in August increased more than the increase seen in the last couple of months.
Inflation remains elevated, and annualized core measures are still above the Federal Reserve’s stated 2% target. With oil prices already elevated and likely to remain high given the ongoing conflict with Iran, it only exacerbates the issue. Considering recent speeches and last week’s payrolls data showing a surprising rebound from the previous month, the Federal Reserve may be squarely focused on elevated inflation when they meet next week.
In all, the 10-year US Treasury yield ticks higher following the report and equity futures are higher as we head into the market open.
This material is intended for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.
