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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US DATA
- Core CPI inflation was stronger than expected in August although with a ‘low’ 0.3% at 0.28% M/M (cons 0.2) after two months of 0.16% M/M.
- Core goods prices contracted again, with -0.10% after -0.33% M/M but this was driven by a further, albeit smaller than most expected, decline in used cars.
- Core goods ex used cars increased +0.07% after -0.18% M/M, in part as new cars interrupted a four-month decline with +0.27% M/M. It's not completely surprising considering some reversal of the easing in supply chain pressures.
- Core services meanwhile accelerated from 0.35% to 0.39% M/M but there are many cross currents under the surface.
- Rent of shelter slowed from 0.43% to 0.29% M/M for its lowest since Aug’21, although this was amplified by a particularly heavy -3.0% decline in lodging away from home. That’s not to detract from OER moderating to 0.38% M/M after last month’s surprise increase to 0.49% M/M for also its softest since Aug’21, although primary rents partly offset this with an acceleration from 0.42% to 0.48 % M/M.
- Away from shelter, non-housing core service measures accelerated swiftly. It increased from 0.19% to 0.37% M/M when excluding OER & primary rents (only slightly higher than some had expected), but this included that lodging drag. Core services excluding all shelter meanwhile accelerated from 0.23% to0.52% M/M for its fastest since Sep’22.
- A clear caveat here is that airfares were a significant driver behind the acceleration, swinging from -8.1% to +4.9% M/M and above most analyst expectations (adding a sequential +0.09pps to overall core CPI in the process). PPI rather than CPI airfares feed into PCE calculations, denting its impact.
- There are some signs of underlying strength in these supercore measures though, with non-health insurance components of medical care services growing strongly. Professional & hospital services combined increased +0.65% after +0.1% M/M for the fastest pace since Aug’22 and before that Feb’21.
- Other areas of note: car insurance printed another very strong 2.4% after 2.0% M/M (adding 0.08pps to core CPI), whilst food away from home (excluded from core CPI but a 7% weight in core PCE) bounced from moderating to 0.17% in July back to 0.34% M/M.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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