WASHINGTON — The August consumer price index data suggest modest price gains will remain the norm.
August CPI posted a 0.2% decrease and core was unchanged (up 0.0143% unrounded; the first time since October 2010 it did not gain). These produced a 1.7% rise overall and a 1.7% gain in core rates over the year, still below the 2% that is considered the rate that policy-makers are targeting.
Food prices rose 0.2% as meats and dairy costs rose.
Energy posted a 2.6% decline in its biggest drop since March 2013 on a 4.1% drop in gasoline (also down 4.1% before seasonal adjustment) and a 2.8% slide in natural gas. Energy recently has been a big factor behind tame inflation, but was not the only restraining factor in August.
In core, multiple other factors contributed to the unchanged result. Apparel posted a 0.2% decrease on dips in men's and girls' clothing, drug prices were unchanged, used cars posted a 0.3% decline, airfares were down 4.7%, and recreation printed 0.4% lower on lower video-audio costs.
Owners' equivalent rent was up 0.2%, in a return to trend. OER is up 2.7% over the year.
The inflation data were all pretty favorable. In a footnote the August real earnings result was up 0.4%, bolstered by a 0.2% gain in average hourly earnings and the 0.2% dip in CPI.
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