The AIER On a regular basis Value Index (EPI) rose 0.21 p.c to 296.7 in August 2025. Our proprietary inflation index is up 2.9 p.c since January 2025, and this enhance marks its ninth consecutive month-to-month rise. Among the many 24 worth classes, 13 noticed worth will increase, two have been unchanged, and 9 noticed declines in August. The biggest worth will increase occurred in web companies and digital info suppliers, tobacco and smoking merchandise, and leisure studying supplies, with the highest three worth declines seen in nonprescription medicine; admission to films, theatres, and live shows; and buy, subscription, and rental of movies.
AIER On a regular basis Value Index vs. US Client Value Index (NSA, 1987 = 100)
On September 11, 2025, the US Bureau of Labor Statistics (BLS) launched its August 2025 Client Value Index (CPI) information. The month-to-month headline CPI rose 0.4 p.c (lacking forecasts of a 0.3 p.c enhance) whereas the core month-to-month CPI quantity elevated by 0.3 p.c, which met expectations.
August 2025 US CPI headline and core month-over-month (2015–current)
The meals index rose 0.5 p.c in August after being unchanged in July. Meals at residence elevated 0.6 p.c, with all six grocery classes larger. Vegetables and fruit climbed 1.6 p.c, led by tomatoes up 4.5 p.c and apples up 3.5 p.c. Meats, poultry, fish, and eggs gained 1.0 p.c, with beef rising 2.7 p.c. Nonalcoholic drinks elevated 0.6 p.c, whereas each dairy merchandise and cereals and bakery merchandise edged up 0.1 p.c. Different meals at residence additionally rose 0.1 p.c. Meals away from residence superior 0.3 p.c, with full-service meals up 0.4 p.c and limited-service meals up 0.1 p.c.
The vitality index elevated 0.7 p.c, reversing a 1.1 p.c July decline, with gasoline up 1.9 p.c, electrical energy up 0.2 p.c, and pure fuel down 1.6 p.c. Excluding meals and vitality, the core index rose 0.3 p.c, matching July. Shelter superior 0.4 p.c, together with house owners’ equal lease up 0.4 p.c, lease up 0.3 p.c, and lodging away from residence up 2.3 p.c. Airline fares jumped 5.9 p.c after a 4.0 p.c rise in July. Used vehicles and vans gained 1.0 p.c, attire rose 0.5 p.c, new autos elevated 0.3 p.c, and family furnishings superior 0.2 p.c, whereas recreation and communication each slipped 0.1 p.c. Medical care declined 0.2 p.c, following a July enhance of 0.7 p.c, as dental companies fell 0.7 p.c and prescribed drugs dropped 0.2 p.c; physicians’ companies rose 0.3 p.c and hospital companies have been unchanged.
The headline Client Value Index rose 2.9 p.c between August 2024 and August 2025, which was in step with the forecast. Surveys predicted a 3.1 p.c enhance within the year-over-year core CPI measure, which it did.
August 2025 US CPI headline and core year-over-year (2015 – current)
The meals at residence index rose 2.7 p.c over the 12 months ending in August. Meats, poultry, fish, and eggs climbed 5.6 p.c, whereas nonalcoholic drinks superior 4.6 p.c and different meals at residence elevated 1.5 p.c. Vegetables and fruit rose 1.9 p.c, cereals and bakery merchandise gained 1.1 p.c, and dairy and associated merchandise edged up 1.3 p.c. Meals away from residence elevated 3.9 p.c, with full-service meals up 4.6 p.c and limited-service meals up 3.2 p.c.
The vitality index rose 0.2 p.c over the 12 months. Gasoline fell 6.6 p.c and gasoline oil declined 0.5 p.c, whereas electrical energy elevated 6.2 p.c and pure fuel surged 13.8 p.c. Excluding meals and vitality, the core index gained 3.1 p.c, led by shelter up 3.6 p.c. Further will increase have been seen in medical care at 3.4 p.c, family furnishings and operations at 3.9 p.c, used vehicles and vans at 6.0 p.c, and motorized vehicle insurance coverage at 4.7 p.c.
Core shopper costs accelerated in August 2025, rising 0.3 p.c on the month and three.1 p.c year-over-year, with the headline index up 0.4 p.c, the quickest since January. Items inflation firmed to 0.3 p.c, matching the strongest tempo since mid-2023, as classes like new and used autos, attire, and home equipment superior. Analysts debated the position of tariffs, noting will increase in beef and tomatoes but additionally outright declines in tariff-exposed classes corresponding to home equipment and private computer systems. Companies inflation proved stickier, with airfares up 5.9 p.c and lodging 2.3 p.c, whereas shelter prices added 0.4 p.c, their largest month-to-month achieve this 12 months.
Tariff pass-through seems to be plateauing. Estimates recommend the coefficient of tariff shocks to CPI fell to 0.03 in August from 0.23 in July, according to latest worth drops in classes corresponding to furnishings, sporting items, and electronics. Companies that raised costs earlier within the 12 months look like moderating amid shopper resistance, although common inflation throughout tariffed items nonetheless rose barely — a worrisome signal that opportunistic pricing could also be creeping in. Diffusion indexes reinforce that worth pressures stay broad: practically half of core CPI elements are nonetheless rising at an annualized charge above 4 p.c, though the share of classes posting outright declines climbed to 36 p.c, up from 27 p.c final month.
Labor market information provides complexity to the inflation backdrop. Preliminary jobless claims surged to their highest stage in practically 4 years, reinforcing considerations that unemployment is trending larger after earlier payroll revisions minimize development estimates sharply. Actual wages edged up simply 0.7 p.c from a 12 months earlier, the weakest in over twelve months, underscoring that family buying energy stays strained. Whereas surges in discretionary classes like airfares and lodges level to still-resilient demand, the persistence of excessive shelter prices alongside rising claims suggests a softer labor market could also be colliding with entrenched service-sector inflation.
Market response captured the strain. Fed funds futures now worth about 27 foundation factors of easing at subsequent week’s FOMC assembly, with expectations for roughly 72 foundation factors of cuts by year-end. Policymakers are prone to ship an preliminary 25 foundation level discount, however right this moment’s firmer inflation print complicates the trajectory for subsequent conferences. If core inflation continues to run at August’s tempo, the likelihood of a number of cuts diminishes, leaving the Fed to steadiness labor-market softness towards dangers that tariff dynamics, shelter inflation, and opportunistic worth will increase may maintain underlying inflation elevated effectively into the autumn.
