Price Check: September 9 – 13

Lower energy prices checked the growth of inflation during August. Here are the five things we learned from U.S. economic data released during the week ending September 13.

Another month of moderate consumer inflation in August. The Consumer Price Index (CPI) increased a seasonally adjusted 0.2 percent during the month, matching its July gain. This left the Bureau of Labor Statistics measure up 2.5 percent over the past (the smallest year-over-year increase in consumer prices in 3.5 years). Energy CPI dropped for the third time in four months (-0.8 percent) as gasoline prices fell 0.6 percent. Food prices edged up 0.1 percent, although prices for food away from home jumped 0.3 percent. Net of energy and food, core CPI jumped 0.3 percent for the month (its largest increase since April) and 3.5 percent over the past year. Rising were prices for transportation services (+0.9 percent), shelter (+0.5 percent), and apparel (+0.3 percent). Prices fell for used cars/trucks (-1.0 percent), medical care commodities (-0.2 percent), and medical care services (-0.1 percent).

Wholesale prices also increased modestly in August. The Producer Price Index (PPI) for final demand advanced a seasonally adjusted 0.2 percent after holding steady in July. The core wholesale price measure—which nets out energy, food, and trade services—repeated July’s 0.3 percent increase. Goods PPI was flat in August, as the 0.9 percent drop in energy prices counterbalanced increases for food (+0.1 percent) and core goods (+0.2 percent). Services PPI rose 0.4. percent, boosted by trade services’ 0.6 percent bump. The Bureau of Labor Statistics reports that headline PPI has risen 1.7 percent over the past 12 months (its smallest gain since February), while the core measure has jumped 3.3 percent.

Consumer confidence edged up in early September. The University of Michigan Index of Consumer Sentiment added 1.1 points to a seasonally adjusted 69.0 (1966Q1=100). The index was up 1.8 percent from a year earlier. The current conditions index rose by 1.6 points to 62.9 (-11.5 percent versus September 2023), while the expectations measure added 9/10^ths of a point to 73.0 (+11.1 percent versus September 2023). One-year inflation expectations of +2.7 percent represented its fourth consecutive monthly decline. The press release noted that “consumers remain guarded as the looming election continues to generate substantial uncertainty.”

Inflation continued to dampen small business owners’ sentiment in August. The Small Business Optimism Index from the National Federation of Independent Business lost 2.5 points to a seasonally adjusted 91.2 (1986=100). The decline reflected a full giveback of July’s rise and kept the measure below its historical average of 98.0 for 32 straight months. Only two of 10 index components improved in August: current job openings and plans to make capital outlays. The other eight measures experienced declines, including sizable drops in expected real sales, earnings trends, and expectations for economic growth. The press release noted that “inflation remains the top issue for owners as sales expectations plummet and cost pressures increase.”

Wholesale sales and inventories grew in July. Wholesaler inventories edged up 0.2 percent to a seasonally adjusted $903.5 billion. Inventories were 0.4 percent larger than that of a year earlier. The Census Bureau report finds durable and nondurable inventories expanding 0.1 percent and 0.5 percent, respectively. Sales at wholesalers jumped 1.1 percent to $671.0 trillion. Sales have risen 2.9 percent over the past year. Durable goods sales increased by 0.5 percent, while nondurable goods sales rose by 1.6 percent. The inventory-to-sales (I/S) ratio of 1.35 was off a basis point from June and three basis points from a year earlier. The I/S ratios for durable and nondurable goods were 1.80 and 0.94, respectively.

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending September 7, 2024, First-Time Claims, seasonally adjusted): 230,000, +2,000 vs. the previous week, -3,000 vs. the same week a year earlier). 4-week moving average: 230,750 (-0.8% vs. the same week a year earlier).
• Import Prices (August 2024, All Imports, not seasonally adjusted): -0.3% vs. July 2024; +0.8% vs. August 2023. Nonfuel Imports: -0.1% vs. July 2024; +1.3% vs. August 2023.
• Export Prices (August 2024, All Exports, not seasonally adjusted): -0.7% vs. July 2024; -0.7% vs. August 2023. Nonagricultural Exports: -0.6% vs. July 2024; -0.1% vs. August 2023.
• Consumer Credit (July 2024, Non-Real Estate Backed Credit Balances, seasonally adjusted): $5.094 trillion (+25.5 billion vs. June 2024; +1.9% vs. July 2023).
• Monthly Treasury Statement (August 2024, Federal Government Budget Deficit Thus Far in FY2024): -$1.897 trillion (+24.4% vs. comparable FY2023 months).

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