US Inflation Disappoints Ahead of Fed Interest Rate Decision

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The U.S. Department of Labor released August’s CPI reading as being a drop by 0.1%. Forecast was calling for the reading to be flat. Another black eye on the headline CPI was that July’s inflation report was revised to 0.0% from a preliminary 0.1% gain.

The core-CPI, which excludes food and energy, showed a gain of 0.1% on the monthly reading. Bloomberg was looking for a consensus of 0.2% in August. The prior month was revised upward to a gain of 0.2% from 0.1%, according to forex calendar.

Perhaps the Fed can hang its hat on the annual numbers, comparing the inflation at the consumer level to August of 2014. That annual change was up 0.2% on the headline, but the core-CPI reading was up by 1.8% on an annual basis.

Remember that the Federal Reserve really wants the inflation rate at 2.0% to 2.5%.

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