EmailCPI was up 0.4% in August (Briefing.com consensus +0.2%), pushed higher by broad-based price increases that were led by the gasoline, shelter, food, and apparel indexes. The August report left the CPI Index up 3.8% over the last 12 months before seasonal adjustment.
Core CPI rose 0.2%, with the shelter and apparel indexes serving as the biggest contributors to the increase. Core CPI, which is up 2.0% over the last 12 months, is at its highest point since November 2008.
The Fed is apt to take some comfort in core CPI being up 2.0% year-over-year, cognizant that deflation is not a battle it wants to be fighting. On the flip side, though, the rising trend here is why the bar for QE3 remains quite high for some members.
Having said that, the initial claims report for Sept. 10 could be viewed by more dovish members as another marker for why the Fed needs to take further steps with monetary policy to try and stimulate economic growth. Claims rose 11,000 to 428,000 (Briefing.com consensus 410,000), bringing the 4-week moving average up to 419,000. These claims levels are inconsistent with payroll growth exceeding 100,000.
Continuing claims for the week ending Sept. 3 fell 12,000 to 3.726 million, yet that was higher than the 3.700 million expected by the Briefing.com consensus.
The Empire State Index produced a reading of negative 8.8 (Briefing.com consensus -4.0). New orders held fairly steady at -8.0, but the bigger point is that a negative number still connotes contraction in this manufacturing region.
