MNI DATA ANALYSIS: US August CPI Rises 0.2%, Core Up 0.1%>

--Overall CPI Slips To +2.7% Y/Y, Core Slows To +2.2% Y/Y

By Kevin Kastner, Shikha Dave, and Harrison Clarke

     WASHINGTON (MNI) - The CPI data suggest that consumer inflation 

remains steady, with the headline and core measures slightly below 

expectations and the year/year rates for the overall and core measures 

down, data released Thursday morning by the Bureau of Labor Statistics 

showed. 

     Overall CPI posted a 0.2% increase, below the 0.3% gain expected 

by analysts and in line with the 0.2% market estimate, while the core 

CPI rose 0.1%, below the 0.2% analyst expectation.

     Unrounded, the month/month rise for overall CPI was +0.223%, while 

the unrounded increase for core CPI was +0.082%, on the low end of a 

0.1% increase. 

--CORE YEAR/YEAR PRICES SLOW

     Overall, the data point to mildly slower progress in consumer 

inflation, as the year/year rate for both overall and core measures 

slowed modestly. 

     The year/year rate for overall CPI slowed to 2.7% from 2.9%, while 

the year/year rate for core CPI moderated to 2.2% from 2.4%. 

--RENTS, USED VEHICLES PRICES BOTH HIGHER

     The large owners' equivalent rents category rose 0.3%, while 

medical care prices fell 0.2%, new vehicle prices were flat and used 

vehicles prices rose 0.4%. 

     Energy prices rose by 1.9% for August after a 0.5% decrease in 

July, with gasoline prices up 3.0%, fuel oil prices up 2.2%, electricity 

prices up 0.3%, and gas utilities prices up 0.9%. Energy prices were 

down 0.1% unadjusted. Seasonal adjustment factors look for a larger 

unadjusted drop in late-summer. CPI excluding only energy was up 0.1%. 

     Food prices were up 0.1% in August, with food at home prices 

flat and food away from home prices up 0.2%. 

--INITIAL JOBLESS CLAIMS FALL

     In other data released on Thursday, the level of initial claims 

fell by 1,000 to 204,000 in the September 8 holiday week after dipping 

to 205,000 in the previous week. The four-week moving average fell by 

2,000 to 208,000, and could fall next week as the 210,000 level in the 

August 18 week rolls out of the equation. These are the lowest levels 

for both initial claims and the moving average since the December 6, 

1969 week, when they were 202,000 and 204,500, respectively. 

     Continuing claims fell by 15,000 to 1.696 million in the September 

1 week, with the four-week moving average down to 1.711 million. This is 

the lowest level for insured unemployment since the December 1, 1973 

week, when it was 1.692 million. 

     All measures of claims remain below their year-ago levels, when 

filings were elevated in the aftermath of the hurricanes. Even leaving 

beside that special consideration, the recent claims levels are evidence 

of a very tight labor market. Initial claims could be boosted in the 

coming weeks pending Hurricane Florence and other storms.  

     ** MNI Washington Bureau: 202-371-2121 ** 

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