The annual rate of US consumer inflation halved from nearly 3% in the period from July 2018 to February 2019 and then subsequently fluctuated in a range from 1.5% to 2.0%. However, “headline” inflation is known to be volatile and so reference is often made to “core” inflation figures. This measure has mostly ranged between 1.7% and 2.3% in recent years and it has not been below 2.0% since early 2018. It has now just hit a new post-GFC high.
The latest consumer price index (CPI) figures released by the Bureau of Labor Statistics indicated seasonally-adjusted consumer prices increased on average by 0.1% in August, in line with the consensus figure but less than July’s 0.3% increase. On a 12-month basis, the inflation rate remained at July’s annual rate of 1.8%.
NAB economist Tapas Strickland described the figures as “further challenging the notion the Fed needs to step up its easing simply because it is missing on its inflation mandate.”
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 +0.3% for the month, higher than the 0.2% which had been expected but the same-sized increase as in the previous two months. As a result, the annual rate moved up to 2.4% from July’s comparable figure of 2.2%.