The core inflation rate slowed to 0.1 percent in August, its lowest rate since April. This brought the year-over-year inflation rate in the core index to 2.2 percent. A 1.9 percent jump in energy prices brought the overall rate to 0.2 percent in August and 2.7 percent over the last year.

Inflation was well contained in almost all areas of the core except shelter. The core index excluding shelter actually fell by 0.1 percent in August. This index is up by just 1.3 percent over the last year and shows no evidence of any acceleration over the last five years.

Traditional problem areas in the core seem well under control. The medical care index fell by 0.2 percent for the second consecutive month. It is up 1.5 percent over the last year. Education did rise by 0.5 percent in August, but it is still up by just 2.7 percent over the last year. The index for auto insurance, which has been a major contributor to inflation, was flat in August. It is up 6.4 percent over the last year, but has been rising considerably less rapidly in recent months.

Overall, inflation seems well under control outside of shelter.