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MNI BRIEF: US Aug Y/Y CPI Seen Above 5% for Third Month

MNI (Washington)

Headline U.S. inflation may have slowed moderately in August, but still be at levels that will unnerve some policymakers.

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Annualized CPI growth in August is set to dip just slightly to 5.3% from 5.4%, according to median market expectations, but still marking the third straight month of year-over-year readings above 5%. Monthly CPI is set to increase 0.4% following a marginally stronger 0.5% gain in July.

Analysts say August's increase is likely to be driven by gains in gasoline and food prices, though wage increases earlier in the year and ongoing supply chain disruptions may also push up inflation. Excluding food and energy prices, CPI should increase 0.3%. From a year earlier, core CPI is expected to rise 4.2% compared to 4.3% in July.

Fed officials will continue to monitor inflation levels, although largely still seeing higher prices as transitory, although increasing consumer expectation levels will be keenly eyed.

U.S. headline inflation

Source: Bloomberg