Inflation across the world’s largest economy was relatively tame last month, consistent with economists’ forecasts, according to Wednesday’s closely-watched BLS update.

Underlying price growth was 0.215% on a MoM basis in July, the outfit formerly known as the world’s preeminent macro statistics agency said. That was in-line with consensus.

Regardless of what so many market commentators still in denial about the nature of this White House’s relationship with the new Fed chair might tell you, the CPI release adds to the case against a September rate hike, coming as it does on the heels of a very poor jobs report. Recall that the MoM core CPI print was unexpectedly negative in June.

On an annual basis, the core gauge rose 2.5% in July, tied for the slowest since inflation began to rear its ugly head in earnest five years ago.

The headline, all-items gauge rose 0.074% MoM, slightly below consensus in Wednesday’s release. The YoY rate there was 3.4%, as expected.

I’d describe the details as mixed. The grocery gauge slipped 0.1%, the first decline since March. So that’s good. And the energy gauge posted another drop, as gas prices continued to moderate from the war highs.

Used car prices rose meaningfully over the month, but remained in deflation when measured on a YoY basis. Apparel prices ticked up after falling sharply in June. The shelter gauge posted a modest 0.1% advance for the second straight month — these are the smallest MoM gains for the shelter component since early 2021.

As to the CPI-derived versions of the so-called “supercore” measure the Fed watches as an early warning sign of wage-price spiral risk, the services ex-shelter print was 0.36% MoM against a 0.09% MoM decline in June. Services ex-OER/rent rose 0.19%, versus a 0.20% decline the prior month. That latter print’s easily soft enough to comfort doves.

Although core goods swung back to a MoM gain in July after slipping in June, the advance was a tolerable 0.2%. Even the Computer Software and Accessories category, which is being eyed closely for AI-related inflation, decelerated, posting a 0.50% rise, down dramatically from the prior month’s gain.

At a ~coin flip, market pricing for the September FOMC meeting was too aggressive headed into this release. Those odds should come off in the wake of the core readout, and as of this writing they already have, albeit not by a lot. Subjectively, I think the odds of a hike from Kevin Warsh next month are 25% at best.