Annual core CPI in August rose to 2.4% vs. 2.3% expected

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August Retail Inflation Touches 10-Month High of 3.21%, July IIP Growth at 4.3%

The core reading reflected the biggest monthly rise in medical-care costs since 2016 and record increases in health-insurance prices.

The "quick estimates" of the Index of Industrial Production (IIP) for July showed that manufacturing sector output rate rose 4.2 per cent in July from a year-on-year rise of 7 per cent.

A separate Labor Department report Thursday showed average hourly earnings, adjusted for price changes, rose 1.5% in August from a year earlier, following 1.4% in July.

Similarly, the rate of retail inflation, represented by the Consumer Price Index (CPI), moved up a bit to 3.21 per cent in August as against 3.15 per cent in July and 3.65 per cent in August 2018.

The cost of living in the United States rose more quickly than expected again last month.

US consumer prices rose slowly in August, held down by weak energy prices that masked a broader firming in price pressures.

The so-called core PPI climbed 1.9% in the 12 months through August after increasing 1.7% in July.

The Fed, which has a 2 per cent inflation target, tracks the core personal consumption expenditures (PCE) price index for monetary policy. It was enough to push core inflation over the past 12 months up by 2.4%, the largest 12-month increase since July 2018. Although consumers are still in great shape, with the unemployment rate remaining at 50-year lows and wage growth at decade highs in July, it is believed that without the industrial support, consumer spending, alone, may not be able to sustain economic growth at a healthy pace. The CPI gained 0.3 per cent in July.

While the resumption of trade talks has eliminated the odds for a 50bps rate cut in September according to Fed funds futures and shifted demand slightly away from safe-haven assets, a large miss in the upcoming data could bring the case back on the table.

Prices for a wide array of goods and services rose last month.

With energy costs falling in August for a third month out of the past four, the overall price increase slowed leaving consumer prices rising a modest 1.7% over the past year.

Apparel prices rose 0.2 per cent after gaining 0.4 per cent in the prior month.

Mining growth was 4.9 per cent in July as compared to 3.4 per cent in the same month last fiscal.

However, at the core level, which excludes both food and energy prices, consumer prices were up by 0.3% on the month (consensus: 0.2%) and by 2.4% in annual terms (consensus: 2.3%).

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India's August retail inflation rises to 3.21%