The BLS has released the August Consumer Price Index (CPI). Let’s take a look.

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.4 percent in August, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The August level of 219.086 (1982-84=100) was 5.4 percent higher than in August 2007.

On a seasonally adjusted basis, the CPI-U decreased 0.1 percent in August, following a 0.8 percent increase in July. The index for energy fell 3.1 percent in August after three consecutive sharp increases. The gasoline index declined by 4.2 percent in August but is 35.6 percent higher than in August 2007. The index for household energy, which was up 3.8 percent in July, declined 1.6 percent in August. The food index advanced 0.6 percent in August after rising 0.9 percent in July. The index for food at home rose 0.8 percent in August after a 1.2 percent increase in July and is up 7.5 percent over the past year. The index for all items less food and energy increased 0.2 percent in August after increasing 0.3 percent in July.

Table A. Percent changes in CPI for All Urban Consumers (CPI-U)

click on chart for sharper image

In the grand scheme of things a one month decline of -0.1% is nothing to write home about. Also note that the CPI is still +5.4% vs. a year ago. However, get used to seeing the word “decline” because more of it is coming. If oil prices keep falling (likely), or even if they stabilize around this area we are going to see some negative year over year CPI readings in the upcoming months.

Mike “Mish” Shedlock
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