The U.S. August CPI data show continued subdued inflation in a report that suggests price hikes will remain low on the list of possible problems for some time. August CPI printed +0.3% and core flat (+0.0465% unrounded), about as expected and almost the same readings as in July. Over the year CPI is +1.1% and over-the-year core +0.9%, extremely low rates of gain that are supporting only modest inflation expectations in financial markets. Food printed +0.2% in contrast to the dip in PPI food, as fruits and vegetables rose. Energy printed +2.3% in a second gain as gas gained 3.9%. In core, new cars at +0.3%, tobacco +0.4%, and drugs +0.6% were offset by -0.1% airfares, -0.1% apparel after three months of gains, -0.2% recreation, and flat education as text costs fell. Owners' Equivalent Rent was flat and rent -0.1% in its first drop since November 2009. Perhaps the lower housing costs reflect competition from foreclosure rentals. August marked the fourth month that these costs slowed, and they are a main driver of low core inflation. A bottom line is that moderate price gains should set aside deflation talk for now. Core inflation, for example, is steady, posting its fifth +0.9% in a row in its over-the-year gain. Low, yes; falling further, no. As low as it can reasonably go, perhaps.