US CPI Review: August 2023

A divergence in car prices, falling airfares, broad disinflation & more - my August US CPI Review in 12 key points.

Key points

In reviewing the latest US CPI data, I have formed 12 key points, which are as follows:

1. August’s aggregate CPI indices were in-line with my forecasts.

2. A big gap has opened up between wholesale and retail used car prices.

3. Food price growth sees a further deceleration.

4. Energy commodities jump, but a much more modest MoM move appears likely for September.

5. Rent based measures are trending lower, but remain elevated.

6. Education & communication services prices continue to decelerate.

7. Airfares keep falling even as jet fuel prices surge, hurting airline margins.

8. Motor vehicle related expenses continue to surge.

9. Volatility in recreation services & other personal services prices continues, but a disinflationary trend remains.

10. FLASH SEPTEMBER ESTIMATES: unadjusted CPI

    • headline CPI: 3.6% (from 3.7% in August)

    • core CPI: 4.1% (from 4.3% in August)

11. FLASH SEPTEMBER ESTIMATES: spot market rent adjusted CPI

    • headline CPI: 1.0% (from 1.0% in August)

    • core CPI: 0.8% (from 0.9% in August)

12. CPI disinflation is wides…