2018 Economic Calendar
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CPI  
Released On 9/13/2018 8:30:00 AM For Aug, 2018
PriorConsensusConsensus RangeActual
CPI - M/M change0.2 %0.3 %0.0 % to 0.4 %0.2 %
CPI - Y/Y change2.9 %2.8 %2.7 % to 3.0 %2.7 %
CPI less food & energy- M/M change0.2 %0.2 %0.2 % to 0.3 %0.1 %
CPI less food & energy - Y/Y change2.4 %2.3 %2.3 % to 2.5 %2.2 %

Highlights
Contraction in medical costs and apparel and only a marginal increase in food all held down consumer prices in August in results that give the Federal Reserve some breathing space as it focuses on the rise of wage inflation. Consumer prices rose only 0.2 percent with the ex-food ex-energy core up only 0.1 percent -- both results 1 tenth lower than Econoday's consensus. Year-on-year rates are also both 1 tenth below consensus, at 2.7 percent overall and 2.2 percent for the core. These yearly rates began to move higher earlier in the year but, following August's data, appear to have peaked in July.

A second month of decline for medical care, which makes up nearly 1/10 of the overall index, is a striking feature of the data. Year-on-year medical costs are up only 1.5 percent. A third straight drop in apparel prices, down 1.6 percent in the month and 1.4 percent on the year, and a 0.1 percent decline in recreation are also areas of price weakness. Food rose only 0.1 percent in the month with this yearly rate up only 1.4 percent.

Housing makes up more than 40 percent of the index and here the results do show some traction, up 0.3 percent in the month for a 2.9 percent rise from this time last year. Energy, which makes less than 1/10 of the index, is also pulling prices higher, up 1.9 percent in the month for a 10.2 percent yearly gain.

The core rate in this report is watched very closely as a fundamental vital sign of the economy. Going out another decimal shows the monthly gain at not even 1 tenth, at 0.08 percent. If it was not for last week's 0.4 percent pop higher in average hourly earnings for an expansion high 2.9 percent yearly rate, there would be tangible doubts after today's data and yesterday's producer price report whether the Fed would indeed go ahead and raise rates at the month-end FOMC. And though wages have yet to spill over into broader prices, the Fed isn't likely to ignore the risk that they may begin to.

Consensus Outlook
Businesses may be complaining loudly about high costs but prices at the consumer level have been very stable. Forecasters see the consumer price index rising a moderate 0.3 percent in August following a 0.2 percent increase in July. The consensus for the ex-food ex-energy core rate is only a 0.2 percent gain. Year-on-year rates for August are seen at 2.8 percent overall and 2.3 percent for the core, both 1 tenth lower than July.

Definition
The Consumer Price Index is a measure of the change in the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation for the consumer. Annual inflation is also closely watched.

The consumer price index is available nationally by expenditure category and by commodity and service group for all urban consumers (CPI-U) and wage earners (CPI-W). All urban consumers are a more inclusive group, representing about 87 percent of the population. The CPI-U is the more widely quoted of the two, although cost-of-living contracts for unions and Social Security benefits are usually tied to the CPI-W, because it has a longer history. Monthly variations between the two are slight.

The CPI is also available by size of city, by region of the country, for cross-classifications of regions and population-size classes, and for many metropolitan areas. The regional and city CPIs are often used in local contracts.

The Bureau of Labor Statistics also produces a chain-weighted index called the Chained CPI. This measures a variable basket of goods and services whereas the regular CPI-U and CPI-W measure a fixed basket of goods and services. The Chained CPI is similar to the personal consumption expenditure price index that is closely monitored by the Federal Reserve Board.  Why Investors Care
 
[Chart]
It is always a good idea to look at more than a few months of data to get a sense of changes in established trends. Monthly changes in the CPI are mainly volatile because of sharp fluctuations in food and energy prices. The core CPI eliminates the sharper fluctuations.
Data Source: Haver Analytics
 
[Chart]
Yearly changes tend to smooth out more severe monthly fluctuations and give a better idea of the underlying rate of inflation. Even with the smoother trend, note that the core CPI does not fluctuate as much as the total CPI.
Data Source: Haver Analytics
 
 

2018 Release Schedule
Released On: 1/122/143/134/115/106/127/128/109/1310/1111/1412/12
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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