CPI for all items rises 0.1% in August as medical care, shelter indexes increase
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in August on a seasonally adjusted basis after rising 0.3 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.
Increases in the indexes for shelter and medical care were the major factors in the seasonally adjusted all items monthly increase, outweighing a decline in the energy index. The energy index fell 1.9 percent in August as the gasoline index declined 3.5 percent. The food index was unchanged for the third month in a row.
The index for all items less food and energy rose 0.3 percent in August, the same increase as in June and July. Along with the indexes for medical care and shelter, the indexes for recreation, used cars and trucks, and airline fares were among the indexes that increased in August. The indexes for new vehicles and household furnishings and operations declined over the month.
The index for all items less food and energy rose 2.4 percent over the last 12 months, its largest 12-month increase since July 2018. The food index rose 1.7 percent over the last year while the energy index declined 4.4 percent.
Transitory, they said!. Core CPI is up at a 3.6% a.r. in the last 3 months. Core Goods: +3.2%, Core Services: 3.6%, etc…
U.S. Producer Prices Increase Minimally; Core Price Index Strengthens
The Producer Price Index for final demand edged 0.1% higher during August (1.8% y/y) following a 0.2% July rise.(…) Producer prices excluding food & energy strengthened 0.3% last month (2.3% y/y) after edging 0.1% lower in July. (…) The PPI excluding food, beverages and trade services, another measure of underlying price inflation, increased 0.4% (1.9% y/y) last month after easing 0.1% in July. It was the largest increase in three months. (…)
Prices for core goods for final demand were unchanged in August (1.0% y/y) for the fourth time in the last five months. (…) Services prices strengthened 0.3% (2.7% y/y) after easing 0.1%, while trade services prices rose a steady 0.2% (3.8% y/y). (…) Prices for intermediate demand fell 0.7% (-2.9% y/y), down for the third month in the last four. (…)
Trump Delays Tariffs on Chinese Goods Ahead of Trade Talks The U.S. will delay by two weeks a planned increase in tariffs on some Chinese imports, potentially easing chilled relations ahead of planned trade talks next month.
Mr. Trump said on Twitter Wednesday that the U.S. will delay a tariff increase that was to go into effect on roughly $250 billion in goods on Oct. 1. He termed the delay a goodwill gesture made at the request of Chinese Vice Premier Liu He, as Oct. 1 marks the 70th anniversary of the founding of the People’s Republic of China.
The planned tariff increases were to cover largely nonconsumer items—materials businesses use to produce goods—with the levy going from 25% to 30%. (…)
The U.S. on Sept. 1 imposed new tariffs on about $111 billion in products, including for the first time some consumer goods imported from China. Another round of tariffs set to take effect Dec. 15 would cover consumer goods extensively, including smartphones, toys and apparel. (…)
China’s Commerce Ministry said Thursday that it welcomed the postponement and that Chinese companies had started making price inquiries for U.S. agricultural goods including soybeans and pork.
Beijing suspended purchases of the U.S. products in August. Ministry spokesman Gao Feng said that the possible resumption of agricultural products isn’t a bargaining chip in trade talks.
So, you think you can dance? If this was not so serious …
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US targets companies with Chinese military ties Pentagon compiles list of army-linked businesses to protect sensitive technologies
China Seeks to Narrow U.S. Talks to Break Deadlock Beijing is looking to narrow the scope of its negotiations with the U.S. to only trade matters, putting thornier national-security issues on a separate track in hopes it would help both sides resolve some immediate issues.
(…) In preparation for a new round of talks scheduled to take place in Washington early next month, Chinese negotiators are making plans to boost purchases of U.S. agricultural products, give American companies greater access to China’s market and bolster intellectual-property protections, these people said.
Beijing hopes to adopt this two-track approach before the planned talks between Beijing’s trade team, led by Vice Premier Liu He, and the U.S. delegation, led by Trade Representative Robert Lighthizer, these people said. While Mr. Liu would continue to lead talks on trade issues, a separate team would be assigned to manage the other geopolitical matters, they said. (…)
Ifo think-tank cuts German growth forecast over next two years Warnings that manufacturing slowdown will spread to services industry and hit jobs
OPEC+ Faces ‘Daunting’ Oil Market Surplus in 2020, IEA Says
Demand for the group’s crude in the first half of 2020 will be 1.4 million barrels a day below its August output as production surges from their competitors, including the U.S. Though an increase in stockpiles has taken a pause for now, growth in other countries, including Brazil and Norway means that 2020 could see a significant increase in oil stockpiles and pressure on prices. As an illustration of the challenge OPEC is facing, the U.S. briefly overtook Saudi Arabia as the world’s largest oil exporter in June.
A committee of OPEC+ members is meeting in Abu Dhabi on Thursday to discuss compliance with output cuts that are due to expire in March. Though Russia said earlier this week that deeper cuts are currently off the agenda, the International Energy Agency’s balances suggest the group’s current production levels won’t be enough to prevent a return to inventory builds next year. (…)
Supply from outside the Organization of Petroleum Exporting Countries will grow by 1.3 million barrels a day in the second half of the year, after an “enormous production surge” over the same period last year. That will be followed by a 2.3 million barrel a day increase in 2020. (…)
The agency retained its oil demand growth forecast of 1.1 million barrels a day this year as the market continues to be whipsawed by the trade war between the U.S. and China. Consumption increased by just 200,000 barrels a day in June, meaning world oil demand growth averaged 450,000 barrels a day in the first half.
Those figures should rebound to 2 million barrels a day in the fourth quarter, driven in part by lower prices. For that to happen though, there needs to be no further deterioration in the economic climate or trade disputes, the agency said. (…)
TECHNICALS WATCH
The latest (as of yesterday’s close) 13/34–Week EMA Trend chart courtesy of CMG Wealth:
From the same source:
- NDR Crowd Sentiment Poll: Neutral Pessimism (S/T Bullish for Equities). The current weekly sentiment reading is 60.6. It was 56.7 last week. The current regime is highlighted in yellow.
Source: Ned Davis Research
NDR Disclosure; CMG Disclosure.
Charles Schwab’s Liz Ann Sonders explains:
In the case of Ned Davis Research’s Crowd Sentiment Poll (which is an amalgamation of seven distinct sentiment measures, some attitudinal and some behavioral), even with the latest rally in stocks, sentiment dipped slightly into the “extreme pessimism” zone as you can see below. That has historically been the second-best zone for stocks in terms of annualized performance.
Here’s the Rule of 20 barometer at today’s opening of 3013 with August core CPI at 2.4%:
Oxford Tops Global University Rankings, as China Gains Anew The University of Oxford topped a list of the best universities in the world for the fourth straight year. The U.S. remained the dominant nation overall, but China’s large investment in higher education continues to generate dividends.
The U.S. remained the dominant nation overall, with seven schools in the top 10 and 60 in the top 200, but China’s massive investment in higher education continues to generate dividends, including placing nine more schools than last year in the overall ranking of nearly 1,400 universities. For the first time, China is now spending more money than any other nation, according to one closely watched funding metric. (…)
But the balance of power continues to shift toward Asia in general and China in particular. The number of top 200 universities in Asia grew by two to 24. China had seven in the top 200, the same as last year, led by Tsinghua University at No. 23 and Peking University at 24.
The tilt toward China is easier to see over a longer stretch. The U.S. has lost nine universities from the world top 400 list in five years, while at the same time, China has gained five.
Decline in U.S. performance over the past five years is largely due to disinvestment in public universities, which have seen a 5% drop in institutional income over that time. (…)
In the category of institutional income per academic staff member, a measure of the level of financial resources at the disposal of an institution for academic purposes, Chinese universities are now better off than their U.S. counterparts. (…)