US Consumer Prices Climb For 27th Straight Month

Even with a significant decrease in gasoline prices, consumer prices have still risen overall due to an increase in cost of  food, rent, and electricity.

"The consumer price index gained 0.1% last month after being unchanged in July. A 10.6% decline in gasoline prices was offset by increases in rents, food and healthcare. Food prices rose 0.8%, with the cost of food consumed at home increasing 0.7%. Consumers also paid more for electricity and natural gas." (Reuters)

Rent (shelter) cost was the main driver here. Electricity, healthcare and new vehicle prices also rose significantly.

"...looking at just shelter and rent, we find the former rising 6.24%, a big jump from July's 5.69% and surpassing the previous high from August 1990 of 6.1%. Rent inflation, meanwhile, hit higher highs, rising to 6.74%, a print which only can be found going all the way back to the early 1980s!" (ZeroHedge)

And wages are down again. Persistent inflation combined with depressed wages is not an optimal situation for anyone.

"for the 17th straight month, Americans' wages lost ground relative to the cost of living." (ZeroHedge)

This all means that the Fed will continue raising interest rates by giving...

"...the Federal Reserve ammunition to deliver a third 75 basis points interest rate hike next Wednesday." (Reuters)

Hence the market's poor performance so far today. And the potential for a bumpier road ahead...

'Soft Landing' Harder to See After CPI Report, Investor Says

This morning's hotter-than-expected inflation reading means markets need to adjust to a Federal Reserve 'that is really in inflation-fighting mode,' said Matt Forester, chief investment officer of Lockwood Advisors at BNY Mellon Pershing.

'This idea that we're going to get to a soft landing gets less and less likely if the Fed needs to do more work in order to curtail the inflationary pressures,' he said." (WSJ)

Investors take shelter with some consumer staples stocks after inflation

"Procter & Gamble (PG) was the only Dow stock not showing a loss as investors took refuge in dividend-paying stocks seen as defensive plays." (Seeking Alpha)

Biden on inflation:

"Joe Biden tried the best spin possible, citing 'progress' and hailing a drop in gas prices, but his was a minority opinion. Take MPPM's Guillermo Hernandez Sampere, who called it 'a reality check.'" (Bloomberg)

And remember...