INFLATION SPIKED IN AUGUST
Economists had long assumed consumer prices would rise abruptly at some point, and they certainly did last month. The Consumer Price Index increased 0.4% in August, its biggest one-month advance since its 0.6% gain in January. Higher gas prices were a major influence: they rose 6.3% for August. Core inflation was up 0.2% after four straight 0.1% monthly gains. Yearly consumer inflation is now at 1.9%. Wholesale inflation, as measured by the Producer Price Index, rose 0.2% in August to an annualized pace of 2.4%.
RETAIL SALES STAGE A LATE-SUMMER RETREAT
Americans cut back on retail purchases during August. Retail sales declined 0.2%, a disappointment after the 0.3% July gain. The silver lining: the core number, minus gasoline and auto buying, rose 0.2%.
CONSUMER SENTIMENT INDEX DIPS SLIGHTLY
The University of Michigan’s twice-monthly barometer of the American consumer’s mood fell 1.5 points in its initial September edition. At a mark of 95.3, the index was still 4.5% above where it was a year earlier. While the index’s current conditions component hit its highest level in nearly 17 years, 9% of survey respondents believed that Hurricanes Irma and Harvey had hurt the overall economy.
A MILESTONE FOR THE S&P 500
Recording its highest close ever, the broad equities benchmark settled at 2,500.23 Friday, capping off a 5-day gain of 1.58% and attaining its third round-number highpoint of 2017. The Nasdaq Composite advanced 1.39% for the week to 6,448.47. Setting the pace for the big three, the Dow Jones Industrial Average added 2.16% last week to close Friday at 22,268.34. The Russell 2000 had an even better week, rising 2.31% to 1,431.71; the CBOE VIX again neared historic lows, dropping 16.09% in five days to 10.17.