The August consumer inflation numbers for the US have arrived, and they look a lot like July’s:
No surprises here. As we commented in August (and as IMF research has shown), this kind of disinflationary trend — scraping against the boundary of deflation but not quite plunging through it — is common after prolonged growth slumps.
There are only two reasons the numbers are notable this time round.
First, the FOMC meets again on September 21. With bickering among its members over whether to pursue QE2, a higher-than-expected inflation number could embolden the dissenting ranks even further, adding to the confusion. Not this time.
Second, as the next two charts from the Cleveland Fed illustrate, the producer price and import-export inflation numbers released earlier this week were somewhat higher than expected, bolstered mostly by higher energy prices:
Alas, wholesale and import prices haven’t yet passed through to the consumer price level.
One less thing for Ben Bernanke to worry about.
Related links:
Consumer Price Index Summary – Bureau of Labor Statistics
Disinflation right on schedule – FT Alphaville