CPI inflation steady at 3.2% in August 2019

Analysts see room for rate cut as IIP, inflation numbers disappoint

Overall consumer prices slowed in August, reflecting a big drop in the cost of gasoline and other energy products. It was enough to push core inflation over the past 12 months up by 2.4%, the largest 12-month increase since July 2018.

Data released by the CSO showed that inflation rate for the food basket rose further to 2.99 per cent in August from 2.36 per cent in July.

Highest inflation data was witnessed in Assam at 5.79 per cent and lowest -0.42 in Chandigarh. It has projected retain inflation at 3.1 per cent in second quarter and 3.5-3.7 per cent in the second half of the ongoing financial year.

Commenting on the inflation data, Icra's principal economist Aditi Nayar said with the CPI recording only a mild increase in August 2019 despite the sharp uptick in the food inflation, "we continue to expect the RBI's Monetary Policy Committee (MPC) to reduce the repo rate by 15-25 bps in the October 2019 policy review, given the continuing concerns related to economic growth".

On a year-over-year basis, headline inflation is now at 1.7%, in-line with consensus and 1.8% previously.

Markets are now fully pricing in a 25bps rate cut for next week's two-day FOMC policy meeting (17-18 September) as the core PCE inflation rate remained unchanged comfortably under the Fed's 2.0% target and the ISM business survey found the manufacturing sector in contraction during the month of August.

While the resumption of trade talks has eliminated the odds for a 50bps rate cut in September according to Fed funds futures and shifted demand slightly away from safe-haven assets, a large miss in the upcoming data could bring the case back on the table. Hospital inpatient care prices increased 0.4% and the cost of doctor visits shot up 0.5%, reversing July's 0.5% decrease. The Fed lowered borrowing costs in July for the first time since 2008. It is the lowest level in almost five months and further evidence that the labor market remains strong. Economists polled by Reuters had forecast the PPI would be unchanged in August and rise 1.7% on a year-on-year basis.

The figure stood at 3.69 percent in August previous year.

Clothing costs, which had posted a big jump in June, edged up a small 0.2% in August.

Apparel prices rose 0.2 per cent after gaining 0.4 per cent in the prior month. Prices for new motor vehicles dipped 0.1 per cent. Prices for recreation increased 0.5 per cent, the most since December 2018.

Related News:

  • Nigeria and Iraq pledge to cut output to meet OPEC targets

    Nigeria and Iraq pledge to cut output to meet OPEC targets

    For that to happen though, there needs to be no further deterioration in the economic climate or trade disputes, the agency said. "The installation of the necessary pipelines and terminals is continuing apace, which will ensure that the trend continues".
    Water discovered for first time on planet that may be habitable

    Water discovered for first time on planet that may be habitable

    But the range extends to include temperatures much colder or warmer than Earth because of the constraints of their data. That's because the new tools will be able to observe light across a broader range of wavelengths.
    Trump on 9/11 vows to hit Taliban 'harder'

    Trump on 9/11 vows to hit Taliban 'harder'

    Mr Trump has said he wants to withdraw around 5,000 of the 14,000 United States military personnel still in the country. The number of USA troops peaked at around 100,000 but began to drop steadily after Bin Laden was killed in 2011.
  • Korea says it tested super-large multiple rocket launcher

    Korea says it tested super-large multiple rocket launcher

    Tuesday's projectile launches came a day after a senior North Korean official said Pyongyang is ready to resume denuclearization talks with the US.
    Canadian dollar lower after Trudeau calls Oct 21 election

    Canadian dollar lower after Trudeau calls Oct 21 election

    Trudeau will have to defend his record, including his handling this year of an ethics crisis that proved politically costly. Canada's official campaign period has often been fraught with unexpected turns that can lead to unforeseen outcomes.
    Trump says October hike in China tariffs delayed 2 weeks

    Trump says October hike in China tariffs delayed 2 weeks

    US-China trade tensions intensified earlier this month when Washington and Beijing imposed further tariffs on each other. He said the delay had been requested by China, and also follows a move by Beijing to scrap some USA tariffs.
  • Robert Mugabe's Family, Zimbabwe Wrangle Over Burial At National Monument

    Robert Mugabe's Family, Zimbabwe Wrangle Over Burial At National Monument

    However on Wednesday Leo Mugabe told The Associated Press on Wednesday that relations are good between the family and Mnangagwa. A portrait of former president Robert Mugabe stands outside the room where his body lies in state.
    Nigerian nationals evacuated from South Africa

    Nigerian nationals evacuated from South Africa

    Nigeria isn't the only African nation evacuating its nationals from South Africa in the wake of the xenophobic attacks . But there is also high unemployment in the country and some people feel foreigners are taking their jobs.
    Taliban seek US’ clarification on stalled peace talks

    Taliban seek US’ clarification on stalled peace talks

    He insisted that the militant group had not violated any terms and added that there would be no promises before signing the deal. President Donald Trump , asked about the state of U.S. -Taliban peace talks , has said: "They're dead".
  • Watch This Hands-On Video Of The Unreleased Google Pixel 4

    Watch This Hands-On Video Of The Unreleased Google Pixel 4

    The outlet also insisted, citing a reliable source, the Pixel 4 will boast improvements to Google's signature Night Sight feature. This will likely open the Pixel Themes app for customizing the accent colors, font, icon shape, and more on the Pixel 4 .
    No Talks With US While Sanctions In Place: Rouhani

    No Talks With US While Sanctions In Place: Rouhani

    If Israel had to act on its own, I'd imagine they would feel better having a clear-eyed hawk like Bolton at the president's side". A longtime proponent of military-backed regime change in Iran, Bolton's departure was announced by Trump in a Tuesday tweet.
    Rare Harvest Moon Will Take Over Night Sky on Friday the 13th

    Rare Harvest Moon Will Take Over Night Sky on Friday the 13th

    The upcoming harvest moon has also been called a "micro-moon" as as it will appear around 14 per cent smaller in the sky. Supermoons seem to get a lot of attention these days, but the September 2019 full moon is the opposite - a micromoon.


Most liked

Danish central bank expected to mirror ECB and cut key rate
ECB President Mario Draghi made the announcement Thursday to address the growing instability in the European economy. The central bank also extended a promise to keep rates at record lows for as long as necessary.

Nintendo's Ring Fit Adventure is like Wii Fit for the Switch
Ring Fit Adventure will launch on October 18 for $79.99 (UK price TBA), including a copy of the game, a Ring-Con, and a Leg Strap. This mode is a great way to target a muscle group the player wants to improve, like legs, shoulders, lower body or core.

September Democratic debate: Everything you need to know
Univision News will also livestream the debate on its digital platforms, including Facebook , YouTube and Periscope. Candidates will be given one minute and 15 seconds to answer questions and 45 seconds for responses and rebuttals.

NASA joins ISRO to track Vikram 'calling home'
DSN supports both NASA and non-NASA missions that seek to explore the furthest points of our solar system. "India failed. It is keenly awaiting for 3D mapping and sharp images of the south pole region of Moon.

Northern Ireland court dismisses court case over Brexit and peace process
The court heard arguments that a no-deal would have a negative effect on the peace process and endanger the Good Friday Agreement. "Virtually all of the assembled evidence belongs to the world of politics, both national and supra-national", he said.

Nancy Pelosi Blames Mitch McConnell For Stalling Gun Legislation
Mass shootings are defined as those in which four or more people were killed or injured, excluding the perpetrators. A bill to institute universal checks passed the House in February and is now awaiting action in the upper chamber.

Hong Kong protesters urge US President to liberate the territory from China
She urged an end to police violence against protesters and said Congress looks forward to "swiftly advancing" the Hong Kong bill. But the president has suggested that it's a matter for China to handle, though he also has said that no violence should be used.

Goldman Sachs cuts 2019 oil demand growth forecast to 1 million bpd
Five analysts polled by Reuters estimated, on average, that crude inventories fell 2.6 million barrels in the week to September 6. In the United States, drilling companies cut the number of operating oil rigs for a third week.

Michael Schumacher is reportedly 'conscious' in Paris hospital after receiving treatment
Schumacher, 50, was admitted to the Georges Pompidou Hospital for inflammation-reducing treatment. 'I can assure you he's conscious, ' said a female member of staff in the cardiology unit.

Justify failed drug test before Triple Crown win
Will he have to give back his cut of the $60 million in breeding rights that his now-tainted Triple Crown earned? Justify tested positive for the banned substance scopolamine, which veterinarians say can enhance performance.

Supreme Court clears the way for new asylum restrictions to take effect
The effect of that injunction was blunted by the 9th Circuit Court ruling restricting it to Arizona and California. The Trump administration has reason for optimism now that the case is back in the 9th Circuit.

Apple Breaks Chinese Labor Law in Rush to Build iPhones
Since the problems directly involve the Cupertino-based firm, the company ran an investigation by its own on Foxconn factory. Apple's store network has confronted various reactions throughout the years because of poor working conditions.

When should men get a prostate cancer screening?
A simple blood test to spot aggressive prostate cancer could save thousands of men undergoing needless biopsies and treatment. Additionally, the number and type of CTCs present in the blood was also indicative of the aggressiveness of the cancer.

Renee Zellweger reveals how she became 'Judy'
This lead her to reflect on her mental health and helped Zellweger to realise she was struggling with depression. CNN has reached out to Zellweger's representatives for comment.

Pierce Brosnan wants the next James Bond to be a woman
"He was written as a male and I think he'll probably stay as a male", Broccoli told The Guardian last October. The #MeToo movement has been relevant and significant and well needed in our society", he said.