Posted - Filed under Consumer Price Index, Release Observations.


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Prices in August rose by 0.09% on a seasonally adjusted basis as measured by both the CPI-W and CPI-U All Items price indexes.

Last year, the same indexes rose by over 0.5% in August, and so, with that rise being replaced by last month’s small rise, the year-to-year price change – “inflation” – dropped heavily, from around 2% to 1.5%.

The detailed August inflation numbers for the three indexes measuring All Items are:

CPI-U   1.52%

CPI-W   1.46%

Chained CPI-U  1.42% (using not seasonally adjusted data)


The main driver of the drop is fuel costs.  In the chart below we see a large monthly increase in August 2012 being replaced by a small drop this August.  A similar, large monthly jump in September of last year will fall out of next month’s inflation rate.  Pending our forecast of September 2013 price increases, we would expect a further sizable drop in annual inflation for next month.


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