Core CPI Up Most Since January 1991
The BLS CPI Report shows another sharp month-over-month rise, but year-over-year is another matter.
CPI Month-Over Month
- The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in July on a seasonally adjusted basis, the same increase as in June.
- The gasoline index continued to rise in July after increasing sharply in June and accounted for about one quarter of the monthly increase in the seasonally adjusted all items index.
- The energy index increased 2.5 percent in July as the gasoline index rose 5.6 percent.
- The food index decreased 0.4 percent in July, with the index for food at home declining 1.1 percent.
- The index for all items less food and energy rose 0.6 percent in July, its largest increase since January 1991.
- The index for motor vehicle insurance increased sharply in July, as it did the previous month. The indexes for shelter, communication, used cars and trucks, and medical care also increased in July, while the index for recreation declined.
CPI Year Over-Year
- The all items index increased 1.0 percent for the 12 months ending July, a larger increase than the 0.6-
percent rise for the period ending June. - The index for all items less food and energy increased 1.6 percent over the last 12 months.
- The food index increased 4.1 percent over the last 12 months, with the index for food at home rising 4.6 percent.
- Despite increasing in July, the energy index fell 11.2 percent over the last 12 months.
Word About Measurement From the BLS
Data collection by personal visit for the Consumer Price Index (CPI) program has been suspended since March 16, 2020. When possible, data normally collected by personal visit were collected either online or by phone. Additionally, data collection in July was affected by the temporary closing or limited operations of certain types of establishments. These factors resulted in an increase in the number of prices considered temporarily unavailable and imputed. While the CPI program attempted to collect as much data as possible, many indexes are based on smaller amounts of collected prices than usual, and a small number of indexes that are normally published were not published this month.
Poor Measure of Inflation
These indexes supposedly measure inflation.
They do nothing of the kind. The indexes do not include home prices, only rent.
The purported medical inflation is a joke. Anyone who buys their own medical insurance will tell you their costs are up more than the reported 5.9%.
Anyone in college has not been pleased with the rising cost of tuition and rent in college towns.
And anyone with an ounce of common sense knows the current stock market bubble is a measure of inflation.
The CPI is a scam, purposely designed to understate what’s really happening with prices.https://t.co/wsdfH355NB
— Mike “Mish” Shedlock (@MishGEA) September 25, 2019
Focus on Consumer Inflation is Horribly Wrong
Stock prices are not “consumer” inflation, but realistically home prices are.
Regardless, the Fed’s focus on consumer inflation ignoring housing, while averaging medical costs with those on company plans and Medicare is just plain wrong.
Central banks’ seriously misguided attempts to defeat routine consumer price deflation is what fuels the destructive asset bubbles that eventually collapse
For a discussion of the BIS study, please see Historical Perspective on CPI Deflations: How Damaging are They?
Fed Can Blame Itself
I am not blaming the Fed for the coronavirus and these shocks.
However, I am blaming the Fed for its erroneous inflationary tactics that blew three of the biggest economic bubble in succession: 2000, 2007, 2020.
Mish
Not only are prices going up but location is important too. A friend who lives in Putnam County, NY (a wealthier area) pays $3 for a can of albacore tuna. I live in nowhere PA and pay $1.50-$1.75. On the other hand, neither of us can really afford to buy red meat often; we eat a lot of chicken….
Meanwhile, I despair that Congress will do anything to help the 50% of Americans who will be poverty stricken and/or homeless.
The index for all items less food and energy increased 1.6 percent over the last 12 months.
I call horseshit!
We have double digit inflation with now almost nothing left out.
A National Lockdown Could Be The Economy’s Best Hope, Says Minneapolis Fed President
Kashkari also in favor of giving lots of free money to everyone.
Shutting the economy down … again … would cost $trillions.
Now, if they would spent a fraction of what a shut down cost for ubiquitous testing (and quick result) … nah, that would be the right thing … rather, lets pretend its not a big deal / vaccine right around the corner and just roll with it …
“if they would spent a fraction of what a shut down cost for ubiquitous testing (and quick result)”
Testing routines, processes and infrastructures, requires competent people to build and operate. I America, anyone possessing any trace of such qualities, are now subordinate to the undifferentiated idiot army The Fed and government have spent the past 50-150 years to enrich and empower who does not.
You have to remember, anything more intellectually demanding than printing Washington’s face on paper pieces, picking random numbers and dragging ones superiors to kangaroo courts, is too complimecated for those in charge of every institution in America by now.
The Fed has ONE F’ing job, stability of the dollar, and any pretense to other mandates are garbage, the unemployment rate is NOT hteir job but the realm of the political to decide what to do about it. Maintaining assets values is NOT there job ans is in fact completely diametrically in opposition to maintaining the stability of the dollar. And you know what else is none of their F’ing business? How to respond to Covid. I know that the non leadership by Trump just invites commentary from all over, but the Fed has one job only and the last thing we need is a slipperly slope to these unelected ivory tower moneychangers managing our politics and domestic policy. They are the banks in a quite literal sense and if the banks ever rule us or even influence rule of us then there will be no difference between our modern society and the plantation system of the antebellum deep south.
Read that the $600 / week … and long gone … cost a cool $250 billion. And, for what purpose? Did it have to be that much?
Imagine if those $$s spent on developing a coherent covid test / quick result plan …
A drop in the bucket compared to the shareholder and bond holder bailouts of profligate US corporations.
Easy to get a hot cpi when you hand out $thousands AND not have to worry about servicing existing debt.
Just makes the future worse … but it is ALL about moving the ball to November … at any cost.
Yes, it’s Stagflation for now, to be followed by another severe bout of Deflatio, once the stimulus sugar high wears off.
We should do an “inflation” split Mish, so that consumers will find things more “affordable”.
All shorts of shops should now offer a quarter/a half portion for 3/4 of the old price for 1.
Have you noticed ice cream, orange juice, and cereal boxes shrink over the years?
I presume you are referring to the shrinkflation that has been common again in recent years. “1 Quart” size is now commonly 30 oz or 28 oz, etc. Sheets of steel that are “14 gauge” are really close to “16 gauge.” I wish they would quit reducing thicknesses of basic material and referring to them as the same size. Sometimes that little bit of thickness is critical to a project.
But hey, while everyone must spend extra time figuring out if the material being sold today is up to the task at hand, at least the finance guys can pretend inflation is lower than it really is, and that’s what is really important. /s
“I wish they would quit reducing thicknesses of basic material and referring to them as the same size.
You mean, as in the thickness (measured in anything constant) of the dollar?
It’s America. Pretending we are getting wealthier by debasing basic measurement units is what we do here. Anything else, is too complimecated for those who own and run progressive dystopias.
“Anyone who buys their own medical insurance will tell you their costs are up more than the reported 5.9%.”
I am on Medicare.
My wife’s Obamacare plan costs dropped by 12% in 2020 vs 2019.
Bully for you. I just got hit with a 40% increase.