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CPI Jumps Another 0.5% in July, 5.4% From a Year Ago (No Change)

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9 comments on CPI Jumps Another 0.5% in July, 5.4% From a Year Ago (No Change)

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CPI Year-Over-Year

  • The all items index rose 5.4 percent for the 12 months ending July, the same increase as the period ending June.
  • The index for all items less food and energy rose 4.3 percent over the last 12 months
  • The energy index rose 23.8 percent.
  • The food index increased 3.4 percent for the 12 months ending July, compared to a 2.4-percent rise for the period ending June.
  • Rent of primary residence is allegedly up 1.9% from a year ago.
  • OER is allegedly up 2.8% from a year ago.
  • Shelter is allegedly up 2.2% from a year ago.

CPI Month-Over-Month

CPI Month-Over-Month Details 

  • The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in July on a seasonally adjusted basis after rising 0.9 percent in June.
  • The indexes for shelter, food, energy, and new vehicles all increased in July .
  • The food index increased 0.7 percent in July as five of the major grocery store food group indexes rose
  • Food away from home index increased 0.8 percent.
  • The energy index rose 1.6 percent in July, as the gasoline index increased 2.4 percent and other energy component indexes also rose. 
  • The index for all items less food and energy rose 0.3 percent in July after increasing 0.9 percent in June.
  • The index for used cars also increased 0.2-percent.
  • The index for motor vehicle insurance declined in July, and the index for airline fares fell slightly. 

Details are from the BLS Consumer Price Index Report for July.

Year-Over-Year Comments

The rent, shelter, and OER percent changes from a year ago seem absurdly low at 1.9%, 2.8%, and 2.4% respectively.

Given huge increases in reported rents, the BLS measures seem more than a little bit on the low side.

“Inflation is Half Our Mandate”

The Fed called price hikes a “Welcome” Rise in Inflation

Also note Fed Chair Powell’s slip in which he said “Inflation is Half Our Mandate” 

The Fed got far more than it bargained for and the economy is overheating.

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9 Comments
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oee
oee
4 years ago
It seems the inflationistas were wrong last decade and they were wrong now. The used car prices increases are moderating.  I can see that in the next few months we will the the usual tin hat conspirators that will claim that the US govt is hiding the inflation and the Illuminati is manipulating the price of Au that has not risen as wrongly predicted. 
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Eddie_T
Eddie_T
4 years ago
I’m playing a game with my buddies Freddie and Fannie. They don’t really like me, but the rules say I get the same deal as anybody else. This is America, after all.
If all goes well, by this time tomorrow I will have locked the last four investment mortgages I have outstanding in……for 30 years at 3.375% , and I can close as soon as my appraisals are in. (I have so much equity that Freddie and Fannie should have trusted me, but they are demanding new appraisals, which they probably would not do if it was for a personal mortgage. Just one little obstacle to make it harder for an investor, but that’s okay. I can play that.
It’s not all that much really …about a half million. Enough to make the game interesting.
If inflation is higher than 3.375% over the next several years, my cost to finance that half million will be a negative number. I really expect it to be closer to 3%…..but that’s still a good deal. The interest is tax deductible too, and I need that deduction, as it turns out.
The 2:1 leverage I’ll get will be enough to keep me well ahead of inflation if 50 years of data is enough history to make a bet. And the government policy that created Freddie and Fannie makes the leverage about slow risk as you can get, imho.
The only way I lose is if the properties I financed drop considerably more than 50% from here…or something happens and I can’t service the debt.  And the rents will rise every year. (In fairness, so will the taxes and other expenses, but the rents will be roughly double the monthly payments at the outset, and I don’t expect to ever have to lower them).
I love this game.
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Jojo
Jojo
4 years ago
I’m having a lot of freezing problems requiring a browser refresh/reload yesterday and today in the comments.  I am using latest Chrome browser on a Windows 10 machine with 16GB RAM (plenty of memory).  I suspect that Maven is having problems when the comment threads grow too large.  
Am also seeing your advertising blocks “growing” up the page and eventually covering everything.  I just noticed when this happens, there is a small “Close X” vertical tab on the lower left side, which seems to clear this problem.
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TexasTim65
TexasTim65
4 years ago
Reply to  Jojo
Sounds like you need an ad blocker.
I run one on Firefox and never have any problems with speed or ads because they are blocked.
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Jojo
Jojo
4 years ago
Reply to  TexasTim65
I have one but UBlock Origin doesn’t work against Maven ads these days.  I haven’t had the time to dig into the problem.
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Jojo
Jojo
4 years ago
So how much is my SS payment going to increase by?  Or better question, how will the government manage to minimize any SS increases under the premise that inflation was mostly non-existent for 2020-2021?
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TexasTim65
TexasTim65
4 years ago
Reply to  Jojo
That’s the multi-billion dollar question for Social Security and Government workers whose raises are contractually tied to CPI.
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oee
oee
4 years ago
Reply to  TexasTim65
Actually, they are not. BHO froze the US govt salaries for 3 of his 8 years. As a result, fed workers salaries a 6.5 % below in real terms from 2010, which is the first year of the freeze. Also, the politicians are proposing a 2.7% raise vs a 5.4% inflation rate. Thus, fed pay is not keeping up with inflation.
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Ziggy
Ziggy
4 years ago
Owner’s equivalent rent is measured less frequently…every six months.   Google  “owners equivalent rent cpi” for the 11 page PDF.  From page 2 of the PDF…  “Because rents change rather infrequently, the CPI program collects rent data from each sampled unit every six months. (Price collection is monthly or bimonthly for most other CPI items.) Collecting rent data less frequently allows a much larger sample. The CPI divides each area’s rent sample into six sub-samples called panels.  The rents for panel 1 are collected in January and July; panel 2, in February and
August, etc.”
Does this mean that only 1/6th of the current price change shows up every month…I don’t know?   It could explain the low number in today’s CPI report.  If so the gun is loaded and has been shot its just going to take a while for the bullet to arrive.
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