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Tuesday, August 20, 2019 6:53:39 PM EDT

CPI Updated 13-Aug-19 09:13AM ET
Total CPI increased 0.3% m/m in July, as expected, while core CPI, which excludes food and energy, also increased 0.3% ( consensus 0.2%) for the second straight month. Those readings left total CPI up 1.8% yr/yr, versus 1.6% in June, and core CPI up 2.2% yr/yr, versus 2.1% in June.

The uptick in core CPI was broad based. The index for new vehicles (-0.2%) was the notable exception to price gains elsewhere.

The food index was flat for the second straight month.

The energy index was up 1.3%, led by a 2.5% increase in the gasoline index.

The shelter index jumped 0.3% for the second straight month behind a 0.2% increase in the owners' equivalent rent index.

The key takeaway from the report is that it muddles the monetary policy outlook. The year-over-year readings are not exactly "rate-cutting" material, but with everything else going on, the market will be left to conclude that another rate cut is likely since the Fed will want to ensure that everything else going on doesn't lead to a caustic slide in inflation expectations.
All Items0.3%0.1%0.1%0.3%0.4%
Food and Beverages0.1%0.1%0.3%-0.1%0.2%
Equivalent Rent0.2%0.3%0.3%0.3%0.3%
Motor Fuel2.5%-3.6%-0.5%5.7%6.5%
Medical Care0.5%0.3%0.3%0.3%0.3%
Educ and Commun0.2%0.1%0.1%0.1%0.1%
Special Indices