US consumer prices rise 0.2 percent in August

The US economy is slowing and inflation remains contained. That is essentially what yesterday's data mean. Reuters reports:

The Labor Department said prices at the consumer level rose a slight 0.2 percent in August. The core rate, excluding often-volatile food and energy costs, also rose 0.2 percent...

For the 12 months ended in August, core consumer prices rose 2.8 percent, in line with forecasts, compared with 2.7 percent for the 12 months to July.

Overall consumer prices rose 3.8 percent in the 12 months ended in August, compared with 4.1 percent for the July period and Wall Street forecasts of 3.9 percent...

In a separate report, the Labor Department said inflation-adjusted hourly earnings fell in August and were flat over the past 12 months, a sign that rising nominal wages were have not kept up with energy price-induced inflation.

Output at U.S. factories, mines and utilities fell 0.1 percent in August as utility production declined with cooler weather, the Federal Reserve said. Capacity use slipped to a smaller-than-expected 82.4 percent, the lowest level since May...

The University of Michigan's preliminary September consumer sentiment index posted a headline reading of 84.4 -- up from 82 in August and slightly above forecasts of 84.0 -- which analysts attributed to lower gasoline prices.

The survey showed one-year U.S. inflation expectations were at their lowest since March, and five-year inflation expectations also declined.