The annual rate of US consumer inflation has fallen back in August after seven consecutive months of increases. Consumer price index (CPI) figures released by the Bureau of Labor Statistics indicated seasonally-adjusted consumer prices increased by +0.2%, less than the +0.3% expected by economists but the same as July’s +0.2%. However, on a 12-month basis, the consumer inflation rate slipped from July’s 2.9% back to 2.7%.
“Core” inflation, a measure of inflation which strips out the volatile food and energy components of the index, increased on a seasonally-adjusted basis by +0.1% for the month, while the annual rate decreased from its post-GFC peak of 2.3% after revisions to 2.2% in August.
Reaction to the inflation figures was mixed up with responses to BoE and ECB policy meetings and the Turkish central bank’s 6.25% rate hike. 2-year Treasury yields increased by 2bps to 2.76% but 10-year yields slipped 1bp to 2.97% while 30-year yields crept up 1bps to 3.11%. The USD was weaker against the euro and sterling but stronger against the yen.