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Analysts at Nomura offered a review of the US CPI data.

Key Quotes:

“CPI rose 0.2% (0.223%) m-o-m in August, lower than expectations (Nomura: +0.357%, Consensus: +0.3%). Food and energy prices were broadly in line with our expectations (food: +0.091%, energy: +1.877%). However, excluding food and energy prices, core CPI inflation slowed noticeably to 0.1% (0.082%) m-o-m, below expectations (Nomura: +0.256%, Consensus: +0.2%). Most of the downside miss was attributable to volatile goods prices. We do not think that core goods inflation displayed a strong trend in either direction.

Hence, we maintain our medium-term forecast for core inflation. Core service price inflation, which tends to be more sensitive to the status of the labor market than core goods price inflation, decelerated slightly but remained relatively steady. Reflecting CPI and PPI data for August, our forecast for core PCE inflation for the month stands at +0.0% (+0.038%) m-o-m, which would drive down its y-o-y change to 1.9% (1.919%) from 2.0% (1.984%), previously. See US Monthly Inflation Monitor, 13 September 2018.”

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