Core CPI Jumps the Most Since 1982 Led by Used Cars and Trucks

Economists were surprised by the jump in the CPI for April.
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CPI and Core CPI 2021-04

CPI Year-Over-Year

CPI Year-Over-Year Percent Change NSA 2021-04

CPI Month-Over-Month Details 

  • The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8 percent in April on a seasonally adjusted basis after rising 0.6 percent in March 
  • The index for used cars and trucks rose 10.0 percent in April. This was the largest 1-month increase since the series began in 1953, and it accounted for over a third of the seasonally adjusted all items increase. 
  • The food index increased in April, rising 0.4 percent as the indexes for food at home and food away from home both increased. 
  • The energy index decreased slightly, as a decline in the index for gasoline in April more than offset increases in the indexes for electricity and natural gas. 
  • The index for all items less food and energy rose 0.9 percent in April, its largest monthly increase since April 1982. 
  • Nearly all major component indexes increased in April. Along with the index for used cars and trucks, the indexes for shelter, airline fares, recreation, motor vehicle insurance, and household furnishings and operations were among the indexes with a large impact on the overall increase. 

CPI Year-Over-Year Details

  • Over the last 12 months, the all items index increased 4.2 percent before seasonal adjustment. This is the largest 12-month increase since a 4.9-percent increase for the period ending September 2008. 
  • The all items index rose 4.2 percent for the 12 months ending April, a larger increase than the 2.6- percent increase for the period ending March.
  • The index for all items less food and energy rose 3.0 percent over the last 12 months, a larger increase than the 1.6-percent rise over the 12 month period ending in March. 
  • The energy index rose 25.1 percent over the last 12-months, and the food index increased 2.4 percent. 

Other than the jump in used car prices, and perhaps not even that, most of this should have been expected.

Year-over-year comparisons were against the April 2020 Pandemic low.

Next month is another easy comparison that will impact the year-over-year numbers. 

This does not impact my view that the bulk of the inflation jump is behind us. 

For discussion, please see Add David Rosenberg to List of Those Who Believe Inflation is Transitory

Again, we are talking about inflation as measured with does not count home prices and asset bubble.

Mish

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