Going Up: September 9 – 12

Inflation picked up in August. Here are the five things we learned from U.S. economic data released during the week ending September 12.

Consumer prices increased in August. The Consumer Price Index (CPI) rose by a seasonally adjusted 0.4 percent, doubling July’s 0.2 percent increase. The Bureau of Labor Statistics measure has risen 2.9 percent over the past year. Food prices jumped 0.5 percent, with sharp rises in fruits, vegetables, and meat, poultry, fish, and eggs, while energy prices rose 0.7 percent (gasoline: +1.9 percent). Net of both, core CPI went up by 0.3 percent, matching its July increase, and was 3.1 percent higher than a year earlier. Prices increased for used cars and trucks (+1.0 percent), transportation services (+1.0 percent), apparel (+0.5 percent), shelter (+0.4 percent), and new vehicles (+0.3 percent). Prices decreased for medical care commodities (-0.3 percent) and services (-0.1 percent).

Wholesaler prices edged down in August. The Producer Price Index (PPI) for final demand slipped by a seasonally adjusted 0.1 percent, much lower than July’s 0.7 percent increase reported by the Bureau of Labor Statistics . The core wholesale price measure, which excludes food, energy, and trade services, rose by 0.3 percent (July 2025: +0.6 percent). Goods PPI increased by 0.1 percent, with food prices up 0.1 percent and energy prices down 0.4 percent. Services PPI dropped 0.2 percent, including a 1.7 percent decrease for trade services. (Note that PPI does not include the direct impact of tariffs, as the index only tracks domestic production.) 

Consumer sentiment worsened in early September. The University of Michigan’s Index of Consumer Sentiment dropped 2.8 points to 55.4 (1966Q1=100). The index was 21.0 percent below its September 2024 level. The current conditions index fell half a point to 61.2 (-3.3 percent compared to September 2024), while the expected conditions measure decreased 4.1 points to 51.8 (-30.4 percent versus September 2024). Survey respondents have higher inflation expectations: one-year inflation at +4.8 percent and long-term inflation at +3.9 percent. The press release notes that 60 percent of survey respondents gave “unprompted comments about tariffs.”

Small business owners grew more optimistic in August. The Small Business Optimism Index from the National Federation of Independent Business increased by half a point to 100.8 (1986=100). The index was up 9.6 points from a year earlier. Among the index components, four increased (including expected real sales, earnings trends, and current inventories), two remained steady, and four declined (including expected economic conditions and whether it is a good time to expand). The press release noted that “more owners report[ed] stronger sales expectations and improved earnings.”

Wholesalers reported increased sales in July. The Census Bureau estimates merchant wholesaler sales rose 1.4 percent to $711.3 billion. This marks a 6.2 percent increase compared to the previous year. Wholesale durable goods grew by 1.3 percent to $347.3 billion, despite a 1.7 percent decline in the automotive sector, while nondurables experienced a 1.6 percent increase to $364.0 billion. Wholesaler inventories edged up 0.1 percent to $908.1 billion, making them 1.3 percent higher than a year earlier. Wholesale durable inventories decreased slightly by 0.2 percent to $567.9 billion, whereas nondurables increased 0.7 percent to $340.8 billion. The inventory-to-sales (I/S) ratio edged down by a basis point to 1.28, down six basis points from a year earlier. The durables I/S ratio fell by two basis points to 1.64, and the nondurables ratio decreased by a basis point to 0.93. 

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

• Jobless Claims (Week ending September 6, 2025, First-Time Claims, seasonally adjusted): 263,000 (+27,000 vs. the previous week, +33,000 vs. the same week a year earlier). 4-week moving average: 240,500 (+4.2% vs. the same week a year earlier).
• Consumer Credit (July 2025, Outstanding Credit Balances (not real estate-backed): $5.060 trillion (+$16.0 billion vs. June 2025; +0.3% vs. July 2024).
• Monthly Treasury Statement (August 2025, FY2025 Year-To-Date Federal Government Budget Deficit): -$1.973 trillion (+4.0% vs. comparable FY2024 months).

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