US: Headline CPI measure likely edged up by about 0.1% in Aug - RBS

Research Team at RBS, expects the US August headline CPI measure to have edged up by about 0.1%, which would raise the year/year figure marginally to 0.9%.

Key Quotes

“Energy prices could have been little changed in August with the energy component of the CPI expected to have posted a tepid rise of 0.3%. According to AAA, prices at the pump fell for a second month, declining by 2.2% in August. However, after adjusting for seasonality, the CPI component for gasoline could have been unchanged from July. Prices for electricity and fuel oil could have ticked slightly lower last month although that drag may have been offset by another monthly gain in natural gas prices. Meanwhile, food prices could have continued to show weakness in August and were likely little changed for a second straight month.

The core CPI inched up in July by 0.1% (+0.0881 unrounded) although the monthly gain was the most modest since February. We expect the measure to have edged up by a similar pace (0.091% unrounded) in August. A reading in line with our estimate would push the year/year metric down to 2.1%. We look for the advance in the core rate to have been led by two shelter components last month. Rent and homeowners’ equivalent rent could both have advanced by 0.3%, largely in line with their July pace.

Meanwhile, hotel rates and airfares could have slipped for a second straight month. In July, education costs recorded their first monthly decline in sixteen years (falling by 0.1%) and could have remained unchanged last month. Medical care costs could have also registered a more modest monthly gain in August, following two hefty advances in June and July. Meanwhile goods prices could have slipped further last month. While prices for used cars may have declined by as much as 0.7%, apparel prices could have slipped somewhat in August after holding steady in July. Prices for new vehicles however may have ticked up by 0.2% in August.”