Preview: Due September 11 - U.S. August CPI - Firmer on energy and lodging away from home
We expect a slightly stronger US CPI in August, up by 0.4% overall, lifted by energy, and 0.3% ex food and energy, lifted by a correction higher in lodging away from home. Before rounding we expect overall CPI to rise by 0.37% and ex food and energy CPI to rise by 0.26%. Despite a firmer monthly core CPI, we expect its yr/yr pace at 2.4% to be the slowest since March 2021.
This would still be the strongest core CPI increase since April. April’s 0.4% rise was inflated by housing being inflated by a double dose of components that get updated only every six months due to October 2025 not receiving an update due to the government shutdown. Excluding April and January, a month that is often firm on New Year price updates, we are expecting the strongest core CPI since August 2025.
However, we expect the ex food and energy rate to be pushed above trend largely because of a rebound in lodging away from home of 2.0% after two straight declines that exceeded 2.0%, both surprising given that the World Cup was taking place. However lodging away from home is a volatile component, which we note saw a bounce of 2.0% in August 2025 after three straight declines. Lodging away from home is likely to lead a 0.3% rise in housing. We expect owners’ equivalent rent to be marginally slower at 0.2% versus 0.3% in July.
We expect CPI ex food, energy and shelter to rise by a moderate 0.18%, slower than a 0.28% increase in July which corrected an unusual 0.12% decline in June. We expect goods ex food and energy to be unchanged, down from a 0.2% increase in July that was inflated by a 0.4% increase in used autos that we do not expect to be repeated. We expect services less energy to rise by 0.32%. Here most of the detail outside lodging away from home is likely to be subdued but we do see upside risk in air fares on energy feed through. Auto insurance has been a volatile component recently, but we expect little change in August, similar to July after sharp falls in May and June.
We expect a 2.3% increase in energy as gasoline sees renewed gains after slippage in June and July, though the energy gain is unlikely to match the gains seen in March, April and May. We expect food to be subdued with a second straight rise of 0.1%.
We expect yr/yr CPI to remain at July’s 3.4% pace though August is likely to be marginally above 3.4% before rounding while July was marginally below. We expect ex food and energy CPI to slow to 2.4% from 2.5%, though the dip is likely to be marginal before rounding as a 0.31% increase in August 2025 drops out. Still, this would be the slowest yr/yr core CPI increase since March 2021.