The August Consumer Price Index (CPI) report was roughly in line with estimates. The index rose 0.2% from July and 2.5% from a year ago, both matching the consensus estimate from Bloomberg. Core CPI, which strips out more volatile food and energy prices, rose 0.3% from the prior month, a touch hotter than the expected 0.2%. Year-over-year, core CPI rose 3.2%, matching estimates. One of the big factors propping up inflation is housing, which is a market that remains tight.
Morning Brief anchors Seana Smith and Brad Smith break down the report in the video above.
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This post was written by Stephanie Mikulich.
Welcome to Yahoo Finance Live. I'm Shauna Smith alongside Brad Smith. We got breaking inflation data out this morning. CPI crossing the wires right now. On a month-over-month basis, CPI coming in in line with expectations, a rise of a two-tenths of a percent. On a year-over-year basis, the headline number for CPI coming in in line with expectations as well, 2.5%, that is down from the prior reading of 2.9%. Now the core readings for CPI on a month-over-month basis rising three-tenths of a percent, which is a bit hotter than the street had been anticipating for this month, also a tenth of a percent higher than what we saw in the prior month's reading. When you take a look at the headline core CPI number, that was actually in line with expectations on a year-over-year basis at 3.2%. So again, when you take a look at this print overall, pretty much in line with expectations, although, Brad, we did see the hotter than expected core CPI month-over-month print of a rise of three-tenths of a percent.
Yeah, some areas digging into this report that consumers out there are going to be paying close attention to and our viewers as well who are watching some of the market reaction here as futures are still in negative territory. I just want to dig into some of the components here. The index for shelter and of course, month after month, I sound like a broken record, the index for shelter rose half a percent during the month of August. That was the main factor, the BLS says, for the all items increase here. But looking and digging a little bit deeper here as you look through some of the indexes that actually rose the most during the month as well, or increased during August, including shelter, you had airline fares, motor vehicle insurance, education, and apparel. So everybody out there trying to get a swag, they ultimately contributed to that. But then you think about the indexes that decreased as well, and this was interesting. Indexes for used cars and trucks, household furnishings. So not as many people buying lazy boys and couches perhaps, or at least pushing back on the pricing there. And then additionally, Medicare, communication, and recreation also among those that decreased over the month. Uh, so all that considered, we're still taking a look at futures down across the board as of right now, Shauna.
Yeah, we are looking at a bit of a drop here on this report. I think a lot of that has to do with that core CPI month-over-month print of a rise of three-tenths of a percent, a bit hotter than expected. And of course, that begs the question, how big of a problem maybe that could be for the Fed when you bring up the debate between 25 and 50 basis point cut, and you take a look at that hotter than expected month-over-month print, it would make it a bit more tougher, I think, to argue for a 50 basis point cut here at the meeting next week.
