August 2017 Consumer Price Index
Submitted by Atlas Indicators Investment Advisors on September 18th, 2017Prices increased for Americans in August 2017 according to the Consumer Price Index from the Bureau of Labor Statics. Rising 0.4 percent, this latest increase follows an uptick of 0.1 percent in July. Year-over-year, this price proxy increased 1.9 percent, accelerating from 1.7 percent a month earlier. Core inflation which excludes food and energy increased at a more subdued pace, rising 0.2 percent in August and 1.7 percent versus a year ago.
Gasoline and shelter pushed the headline tally higher. As a component of the energy index (which rose 2.8 percent), petrol prices increased 6.3 percent. Shelter rose 0.5 percent, led by the rent index’s 0.4 percent rise. Other areas of price increases included vehicle insurance, medical care, and recreation. Among those categories falling were airline fares and used cars and trucks.
Trends for this measure of inflation are mixed. On a year-over-year basis, the headline tally accelerated for a second consecutive month after decelerating from March through June of this year. However, the core measure of inflation which excludes food and energy has been virtually flat since May.
Stabilized inflation below the Federal Reserve’s explicit target is one of the reasons Atlas believes the central bank will not hike rates for the remainder of the year. These bankers have been reluctant to raise the overnight lending rate banks charge each other, and future inaction is probable unless there is a material change in inflation, something closer to 2.0 percent on a year-over-year basis for this indicator.