Keeping you up to date on the latest data releases.
The headline CPI rose at an annualized rate of 4.6 percent in August and is now up 3.8 percent over the past year. Food prices rose 6.1 percent and energy prices increased 15 percent during the month, but these components were not the only major contributors to the overall increase. Apparel prices proceeded on their northward trajectory in August, rising 14.2 percent, in line with their three-month annualized percent change of 16.2 percent. The 12-month percent change in apparel prices has risen from −0.6 percent in March to 4.2 percent in August.
Owner’s equivalent rent (OER) and rent of primary residence have also picked up recently, rising 2.6 percent and 4.6 percent, respectively, during the month. While on a year-over-year basis, OER is up just 1.4 percent, its three-month annualized percent change has jumped up from 0.9 percent in May to 2.5 percent currently (slightly above its 10-year growth rate of 2.3 percent). August also saw continued upward pressure on underlying inflation measures. The CPI excluding food and energy rose 3.0 percent in August, a similar increase to what we’ve seen in this measure over the past six months (up 2.7 percent).
On a year-over-year basis, the core CPI is now up 2.0 percent. Our measures of underlying inflation—the median CPI and 16 percent trimmed-mean CPI—were even a notch higher in August, rising 3.6 percent and 4.0 percent, respectively. The median CPI is now up 2.0 percent over the past year, while the trimmed mean has risen 2.4 percent. Perhaps even more worrisome is that in August roughly 65 percent of the overall index (by expenditure weight) rose at rates exceeding 3.0 percent, compared to 43 percent in July and an average of 32 percent over the prior 12 months. The last time this much mass was above 3.0 percent was in July 2008 at the height of the oil price shock. Also, just 13 percent of the index was in the other tail of the distribution (a price change of less than 1 percent). Unlike in previous months, where there was a fair amount of disagreement between the trimmed-mean measures and the sticky price CPI, this month the sticky price CPI rose 2.9 percent.