Markets lock in 25bps Fed rate cut as US CPI hits 2.9% in August

CPI rose 2.9% in August, locking in a 0.25% rate cut from the Federal Reserve next week, plain and ￰0￱ monthly number came in hot at 0.4%, jumping from 0.2% in July, according to the ￰1￱ of Labor ￰2￱ more “will they or won’t they.” This print gives the Fed zero excuses. Inflation’s slowing just enough to ease the pressure, and the Fed’s going to ￰3￱ CPI-U now sits at 323.976, up 2.9% ￰4￱ CPI-W, which tracks inflation for wage earners, rose 2.8% annually, landing at ￰5￱ C-CPI-U came in at 2.7% for the ￰6￱ those numbers moved 0.3% month-on-month before seasonal adjustment. Oh, and one caveat; they warned the last 10 to 12 months of data might be revised.

Shelter, food, and energy push core prices again Shelter was the single biggest driver of the monthly ￰7￱ jumped 0.4% in August. Rent? Up 0.3%. Owners’ equivalent rent?

Also 0.4%. People who stayed at hotels or rentals paid 2.3% more than they did in ￰8￱ food index climbed 0.5% in August after being flat in ￰9￱ at home rose 0.6%. All six grocery store categories went ￰10￱ shot up 4.5%, apples jumped 3.5%, and fruits and vegetables overall rose 1.6%. Beef was up 2.7%, while meats, poultry, fish and eggs saw a 1.0% ￰11￱ drinks?

Up 0.6%. Cereal, dairy, and bakery products each moved up 0.1%. Food away from home got more expensive ￰12￱ index rose 0.3% in August. Full-service restaurants increased 0.4%, and fast food joints ticked up 0.1%.

Over 12 months, food at home is up 2.7%, and meats, poultry, fish, and eggs soared 5.6%. Nonalcoholic beverages rose 4.6%, and fruits and vegetables went up 1.9%. Cereals and bakery climbed 1.1%, and dairy rose 1.3%. Food away from home is up 3.9% over the year.

Sit-down meals rose 4.6%, and fast food is up 3.2%. Airfares spike, gas jumps, medical care dips The energy index bounced back 0.7% in August after a 1.1% drop in ￰13￱ jumped 1.9%, even though unadjusted prices rose just 0.3%. Electricity crept up 0.2%, while natural gas dipped 1.6%. Over the year, energy rose just 0.2%.

Gasoline is down 6.6%, fuel oil down 0.5%, but electricity is up 6.2%, and natural gas jumped 13.8%. Stripping out food and energy, core CPI rose 0.3% in August, same as July. That’s a 3.1% annual ￰14￱ shelter, big movers were airline fares, which surged 5.9% in August after a 4.0% rise in ￰15￱ cars and trucks gained 1.0%, apparel went up 0.5%, and new vehicles rose 0.3%. Household furnishings and operations rose 0.2%.

Some stuff ￰16￱ and communication both fell 0.1%. Medical care slid 0.2%, after rising 0.7% in ￰17￱ services dropped 0.7%, prescription drugs slipped 0.2%, and physician services rose 0.3%. Hospital services stayed flat. Annually, shelter rose 3.6%, medical care is up 3.4%, furnishings and operations are up 3.9%, used cars and trucks gained 6.0%, and vehicle insurance rose 4.7%.

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