**MNI DATA IMPACT: US Aug CPI +0.1%, Core Stronger At +0.3%>

--Owners Equivalent Rent +0.2%; Medical Care Index +0.7% 

--Energy Prices Down -1.9% Following 1.3% Gain in August

By Brooke Migdon

     WASHINGTON (MNI) - The August CPI data were a tad stronger than 

expected though energy prices were a drag on headline inflation, data 

released Thursday by the Bureau of Labor Statistics showed. 

     Overall CPI slowed to a 0.1% gain, in line with market 

expectations. Core prices rose 0.3%, coming in above a market median 

which had called for a 0.2% increase. Year/year core prices rose to 2.4% 

following a 2.2% reading in July, the highest since July 2018. 

     The year/year rate slowed moderately to 1.7% from the 1.8% gain 

posted in July. Excluding only energy, the year/year rate was 2.3%, 

reflecting weakness in August energy prices. 

     Here are some of the key takeaways from the data released Thursday: 

     - The core CPI reading was 0.256% unrounded, on the low end 

of a 0.3% reading. 

     - The major core components saw widespread increases. The medical 

care index rose 0.7% and was the largest contributor to the August 

increase in core CPI. The large owners' equivalent rent category 

increased 0.2%, bringing the year/year rate up to 3.3%. Recreation 

prices rose for the first time in two months, climbing 0.5% after a flat 

reading in July. Used vehicle also prices jumped 1.1%. New vehicle 

prices, however, declined for a second consecutive month by -0.1%.  

     - Energy prices plummeted by 1.9% in August following a 1.3% 

increase in July. Gasoline prices lead the decline, falling 3.5%, as 

expected based on negative data from the August AAA and PPI reports. 

Electricity prices also fell, decreasing by 0.3%, but gas utilities 

prices bounced back from a disappointing July, increasing by 0.1% after 

a 1.8% decline. Excluding only energy, CPI was up 0.2%. 

     - Food prices posted a third consecutive flat reading in August, 

with the declining costs of fresh produce, meats and eggs offsetting a 

large increase in dairy prices. Excluding only food, CPI would still 

have been up 0.1%. 

     - Apparel prices slowed by 0.2% in August, but incoming China 

tariffs now target U.S. consumer goods, threatening to should push up 

costs in the near future.                                                                                  

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

[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]