NEW YORK, Sept 17 (Reuters) - U.S. consumer prices
increased slightly more than expected in August as food prices
rebounded and energy costs remained elevated, but core prices
were flat, a government report showed on Friday.
STORY: TABLE:
KEY POINTS: * The Labor Department said its seasonally adjusted consumer price index rose 0.3 percent after rising 0.3 percent in July. * Analysts polled by Reuters had forecast consumer prices gaining 0.2 percent last month. * In the 12 months to August, the CPI rose 1.1 percent after a 1.2 percent increase the prior month. * The increase was in line with market expectations
COMMENTS: JOHN CANALLY, ECONOMIST/INVESTMENT STRATEGIST, LPL FINANCIAL, BOSTON:
'This just gives the Fed room to do quantitative easing. There is no inflation. There is no deflation. It's disinflation.
'This should put downward pressure on bond yields. This is good news for consumers and mortgage rates.
'But if the yield curve is flattening, it signals the economy is weakening. The Fed will be speaking about this on Tuesday.'
BRIAN DOLAN, CHIEF CURRENCY STRATEGIST, FOREX.COM, BEDMINSTER, NEW JERSEY:
'We have zero inflation, with the core number unchanged. Inflation is really not the issue for the U.S. economy at the moment. In fact, we have continued risk of deflation. We did see a dip in dollar/yen because yields were a touch lower, but we don't see this data having a sustained impact going forward.'
URI LANDESMAN, PRESIDENT, PLATINUM PARTNERS, NEW YORK:
'Personally, I don't think this is a huge deal. This is a volatile data series. It's slightly higher than expectations, so maybe it's mildly positive. I think the market is more worried about deflation than inflation, so this could be a relief to those worried about deflation, but ultimately I wouldn't put too much stock in it.
'In general, the market doing a lot better in September than I thought we would be doing, and that's because the data has been better than we thought it would be. I'm not declaring victory yet, but it is mildly encouraging. I was expecting a mild correction over the next two to three week, but that seems less and less likely.'
MARKET REACTION: STOCKS: U.S. stock index futures hold gains after consumer price index data. BONDS: U.S. Treasury debt prices rise. DOLLAR: U.S. dollar little changed. Keywords: USA ECONOMY/CPI (Reporting by New York Economics and Markets Desk; +1-646 223-6300) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
STORY: TABLE:
KEY POINTS: * The Labor Department said its seasonally adjusted consumer price index rose 0.3 percent after rising 0.3 percent in July. * Analysts polled by Reuters had forecast consumer prices gaining 0.2 percent last month. * In the 12 months to August, the CPI rose 1.1 percent after a 1.2 percent increase the prior month. * The increase was in line with market expectations
COMMENTS: JOHN CANALLY, ECONOMIST/INVESTMENT STRATEGIST, LPL FINANCIAL, BOSTON:
'This just gives the Fed room to do quantitative easing. There is no inflation. There is no deflation. It's disinflation.
'This should put downward pressure on bond yields. This is good news for consumers and mortgage rates.
'But if the yield curve is flattening, it signals the economy is weakening. The Fed will be speaking about this on Tuesday.'
BRIAN DOLAN, CHIEF CURRENCY STRATEGIST, FOREX.COM, BEDMINSTER, NEW JERSEY:
'We have zero inflation, with the core number unchanged. Inflation is really not the issue for the U.S. economy at the moment. In fact, we have continued risk of deflation. We did see a dip in dollar/yen because yields were a touch lower, but we don't see this data having a sustained impact going forward.'
URI LANDESMAN, PRESIDENT, PLATINUM PARTNERS, NEW YORK:
'Personally, I don't think this is a huge deal. This is a volatile data series. It's slightly higher than expectations, so maybe it's mildly positive. I think the market is more worried about deflation than inflation, so this could be a relief to those worried about deflation, but ultimately I wouldn't put too much stock in it.
'In general, the market doing a lot better in September than I thought we would be doing, and that's because the data has been better than we thought it would be. I'm not declaring victory yet, but it is mildly encouraging. I was expecting a mild correction over the next two to three week, but that seems less and less likely.'
MARKET REACTION: STOCKS: U.S. stock index futures hold gains after consumer price index data. BONDS: U.S. Treasury debt prices rise. DOLLAR: U.S. dollar little changed. Keywords: USA ECONOMY/CPI (Reporting by New York Economics and Markets Desk; +1-646 223-6300) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.