Commentary Directory

US CPI: August 2023

Jacob Hess
September 13, 2023


9/13/2023 (August 2023)

3.7% YoY (0.6% MoM)

Above Expectations

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Core CPI 4.3% YoY (0.3% MoM)
Energy -3.6% YoY (5.6% MoM)
Food 4.3% YoY (0.2% MoM)
Goods 0.2% YoY (-0.1% MoM)
Services 5.9% YoY (0.4% MoM)

In August, the US witnessed a significant uptick in consumer prices, marking the fastest monthly growth since June 2022. The Consumer Price Index (CPI) rose by 0.6% MoM and 3.7% YoY, a noticeable acceleration from the 3.2% YoY recorded in July.

From BLS

A primary driver behind this surge was the energy index, which reversed its declining trend observed in Q2 2023. Energy prices soared by 5.6% MoM. Breaking it down, the gas index witnessed a substantial jump of 10.6% MoM. In contrast, electricity and natural gas indexes saw marginal increases, with rates of 0.2% MoM and 0.1% MoM, respectively. Fuel oil prices also experienced a significant rise, increasing by 9.1% MoM. On the food front, inflation continued its trend of modest gains, registering a growth of just 0.2% MoM. Both grocery prices and food away from home prices reflected this slow pace, with increments of 0.2% MoM and 0.3% MoM, respectively.

While the headline CPI showed a robust growth, the core CPI (ex-food and energy) recorded a more subdued monthly gain of 0.3% MoM. Goods inflation, excluding energy, remained particularly low, with prices declining by -0.1% MoM. This marked the third consecutive month of decline. A significant contributor to this drop was the used car and vehicle index, which decreased by -1.2% MoM. Other indexes in this segment presented a mix of muted gains or slight declines. Services CPI saw an increase of 0.4% MoM, but its annual pace decelerated by 0.2 percentage points, settling at 5.9% YoY. The shelter index, a consistent contributor to the core CPI's monthly gain, rose by only 0.3% MoM, marking its smallest gain this year.