by Mish

The Econoday Keynesian parrot does not like falling auto prices but is happy about rising medical prices.

Consumer prices remain very soft, failing to match what were modest Econoday expectations for July. Total prices edged 1 tenth higher in July as did the core (less food & energy) which are both no better than the low estimates. Year-on-year rates are also at the low estimates, at 1.7 percent each. Moderation in housing costs remains a major disinflationary force, inching only 0.1 percent higher for a yearly 2.8 percent which is down 2 tenths from June. And wireless services, in keeping with the telecom revolution, continue to move lower, falling 0.3 percent on the month for a yearly decline of 13.3 percent.
Vehicle sales have been weak this year and it’s being reflected in prices which fell 0.5 percent in the month. Lodging away from home is another major negative in the July report, falling a record 4.2 percent as motels and hotels cut prices. On the plus side, apparel prices, which had been on a long negative streak, rose 0.3 percent though the year-on-year rate remains in the negative camp at minus 0.4 percent. Medical care is a plus in the report, rising 0.4 percent for the second straight month with the year-on-year rate, however, edging lower to 2.6 percent. Energy prices are a negative in the report, at minus 0.1 percent, offset by a 0.2 percent rise for food.
Is the dip in inflation the result of one-time effects that will soon pass? Or is it the result of weak wages and general global disinflation? Lack of inflation remains the central trouble in the Federal Reserve’s policy efforts. Today’s results will not be improving expectations for the beginning of balance-sheet unwinding at the September FOMC.

CPI Details

  • Since March, the CPI is slightly negative
  • Since March, the CPI excluding food and energy is growing about 1% annualized
  • New vehicle prices are down for the 5th month
  • Used vehicle prices are down for the 6th month, falling every month this year
  • Medical care commodities are up for the 3rd month
  • Medical care services are up for the second month

The Econoday parrot is the only one I am aware of cheering rising medical prices.

The parrot is always happy when consumers get less for their money, no matter what the category.

Searching for Inflation (But Looking the Wrong Way)

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New York Fed President William Dudley says inflation is “elusive”. For discussion, please see link number 2 above.

Mike “Mish” Shedlock

Export Prices Rise, Led by Agriculture, Finished Goods Flat; Import Prices Barely Move

July export prices rose 0.4% vs a 0.1% rise in import prices. The rise in import prices was in-line with the Econoday consensus estimate.

CPI Hits Consensus, Disappoints Inflation-Loving Parrots

The BLS reports the CPI for All Items rose 0.2% in April as shelter, energy, and food indexes all increase. The 0.2% increase was in line with the Econoday Consensus estimate, but the Econoday parrot was not happy.

Deflation Coming: CPI Supposedly Headed Nowhere, But Let's Dive Inside

The CPI did much of nothing but some are cheering the rise in apparel prices and rent. Let's investigate further.

Producer Prices Unexpectedly Decline

The Producer Price Index (PPI) for final goods unexpectedly declined in July. The PPI fell 0.1% as did the core PPI which excludes food and energy. THe Econoday consensus expected a 0.1% gain.

BLS Reports Net Negative Inflation for 5 Months: Anyone Believe That?

Today the BLS reported the CPI was flat. The Econoday consensus was for a 0.1% rise.

CPI Rises Modest 0.2%, 2.5% from a Year Ago: Your Results May Vary Dramatically

The CPI rose 0.2% in April vs the economists' expectation of 0.3%. Year-over-year the CPI is up 2.5%.

Inflationistas Disappointed: Producer Price Index Flat, Services +0.3%, goods -0.5%

Those rooting for higher inflation were not happy with today’s PPI report that shows producer prices flat for the month vs an Econoday consensus of a 0.1 percent rise.

No Significant Price Pressures: PPI Underperforms Economists’ Expectations

The Producer Price Index (PPI) for final demand rose .2% in August vs an Econoday consensus expectation of 0.3%. Excluding food and energy, the PPI rose 0.1% vs an expectation of 0.2%.

Retail Sales Dive (And It’s Not Just Autos)

Retail sales took a 0.3 percent dive in May vs an Econoday expectation of a 0.1 percent rise.