• Prior was 3.5%
• CPI m/m +0.1% vs +0.1% exp
• Prior CPI was -0.4%
• Unrounded vs -0.349% prior

Core readings:

• Core y/y 2.5% vs 2.5% expected
• Prior core was 2.6%
• Core m/m +0.2% vs +0.2% expected
• Prior m/m +0.0%
• Unrounded % m/m vs -0.017% prior
• Core-CPI services ex-shelter m/m +0.2% vs -0.089% prior
• Core goods +0.2% m/m vs -0.086% m/m prior

Ahead of the report, the market was pricing in a 44% chance of a rate hike in September and 24.4 bps in hikes this year. USD/JPY was trading at 159.04 ahead of the report.

Key sub-components:

• Owners’ equivalent rent: +0.3% vs +0.24% prior
• Rent of primary residence: +0.3% vs +0.15% prior
• Motor vehicle insurance: -0.3% vs -2.0% prior
• Airfares: +2.2% vs +0.2% prior
• Used cars: +0.4% vs -0.2% prior
• Apparel: +0.1% vs -0.6% prior
• Medical care: +0.4% vs -0.1% prior
• Lodging away from home: -2.8% vs -2.3% prior
• Energy m/m: -1.5% vs -5.7% prior
• Gasoline m/m: -2.9% vs -9.7% prior
• Food m/m: +0.1% vs +0.2% prior

Shelter drove roughly two-thirds of the headline increase; energy y/y is running +14.7% with gasoline +24.6% but both were m/m drags. Core goods and core services ex-shelter both flipped positive after June declines; and the NSA index was flat on the month at 333.918.

This article was written by Adam Button at investinglive.com.