US August CPI 2.9% y/y vs 2.9% expected

Headline CPI:CPI at 2.9% is the highest since JanuaryPrior was +2.7m/m reading at +0.4% vs +0.3% expected (unrounded consensus was +0.36%)Month-over-month unrounded % vs +0.287% priorThe rest of the numbers are largely in line.Core CPI:Core CPI +3.1% vs +3.1% expectedCore CPI m/m +0.3% vs +0.3% expected (some forecasts were +0.27%)Core unrounded +0.346% vs +0.228% m/m prior (almost rounded to +0.4%)Real weekly earnings -0.1% vs +0.4% prior (revised to +0.1%)Core goods prices +0.3% vs +0.2% prior
Core services +0.3% vs +0.4% prior
Core services ex shelter +0.2% vs +0.3% prior
Core-CPI services ex-rent/OER +0.2% vs +0.3% prior
Services ex energy +0.3% vs +0.4% prior
Owners equivalent rent +0.4% vs +0.3% priorThe core unrounded number gives this report a touch of a hawkish bent and that likely kills the chance of a 50 basis point cut. I suspect the market was also leaning dovish after yesterday’s lower PPI. However if we go further out the curve, the market has priced in about 10 more basis points cuts in easing through 2026, likely to a spike in initial jobless claims today.In the past three months, there is a pace of inflation that will make it very tough to get below target, and that’s in a period when oil prices have been falling.
This article was written by Adam Button at investinglive.com.

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