US core CPI came in at 0.1% in August vs a consensus forecast of 0.2%, and the headline CPI number printed at 0.2% vs a consensus of 0.3%.

As the table below shows, significant declines in motor vehicle prices were an important contributor to the unexpectedly low CPI number. New vehicle prices remained unchanged in August compared to a 0.3% increase in July, and used cars and trucks showed a 0.4% gain compared to a 1.3% gain in July. Medical care services also showed a decline to -0.2% in August vs. 0.1% in July.

CPI table

US auto sales

Although overall consumer spending in the US has been buoyant, American households have cut back on investment in homes and autos, the two biggest tickets in the household spending budget. That leaves some doubts about the spending capacity of US households.