Headline CPI Actual

August 2007: 207.917
July 2007: 208.299

That's -0.18% for the month, not seasonally adjusted. On a seasonally adjusted basis it was -0.14%. No real surprises there.

CONSUMER PRICE INDEX: AUGUST 2007

The highlights:

Food prices were up.
Apparel took back July's gains.
Housing was flat (very weak).
Transportation and energy were decidedly negative.

That takes some pressure off of Bernanke in the short-term.

On the one hand, as I stated in my last post, oil and commodities were weak in August and have since bounced back. To make matters worse, last year saw a very deflationary commodity selloff. Should we not get another one this fall the year over year headline CPI number might not look so tame in a few more months. The seasonally adjusted CPI is up 2.9% in the last nine months and there are still three months to go.

On the other hand, the CPI (seasonally adjusted) has been extremely flat (0.7% annual rate) for the last three months. If that is the new trend then we're bordering on deflation.

There's quite a bit to think about clearly.