There are two very troubling aspects of the latest BLS CPI report. Did you spot them?
Month-Over-Month Shelter Percent Change
- Shelter: 0.61 percent
- Owners’ Equivalent Rent: 0.53 percent
- Rent of Primary Residence: 0.55 percent
Those are all hot numbers. More importantly, the disinflationary trend in shelter appears to be over.
CPI Year-Over-Year Shelter
Shelter Year-Over-Year Percent Change Shelter
- CPI: 3.8 percent
- Shelter: 3.3 percent
- Owner’s Equivalent Rent: 3.3 percent
- Rent of Primary Residence: 2.8 percent
Components of CPI Percentage Weights
Shelter is 35.32 percent of the CPI.
It’s difficult to have CPI disinflation with rising shelter. It’s nearly impossible to have disinflation with shelter, food, and energy all jumping.
CPI Month-Over-Month
CPI Month-Over-Month
- All Items: 0.64 percent
- All Items Excluding Food and Energy: 0.38 percent
- Food and Beverage: 0.49 percent
- Shelter: 0.61 percent
- Owners’ Equivalent Rent: 0.53
- Rent of Primary Residence: 0.55
- Medical Care Services: 0.00 percent
- Medical Care Commodities: -0.35 percent
- Energy: 3.81 percent
- Gasoline: 5.44 percent
- Food at Home: 0.68 percent
- Food Away from Home: 0.23
That list is the second troubling aspect of the report.
Inflation is very broad based.
Medical care was the only good aspect of the report. Medical car commodities are only 1.45 percent of the CPI. Medical Care Services are 6.893 percent of the CPI.
Nothing else looks any good.
Looking Ahead
Year-over-year numbers are heavily influenced by month-over-month numbers a year ago.
The all items CPI rose 0.10 percent in May of 2025. All Items excluding food and energy rose 0.13 percent in May of 2025.
Numbers higher than the above will make the year-over-year number rise.
Does anyone think we will not have another year-over-year blast still higher next month?
I believe we are going to see reported year-over-year inflation about 4.2 next month up from 3.8 percent. And if energy misbehaves, not even 4.5 percent would be shocking.
For more discussion of the April CPI, please see CPI Hotter than Expected, Highest in Three Years, a Genuine Disaster
Inflation in April was another scorcher. Here are some month-over-month and year-over-year charts.
Also see Real Hourly Earnings Decline Again, No Growth Since Trump Took Office
If it feels like you are not getting ahead, it’s because you aren’t. Six charts.
Remember, they are bureaucrats and not likely to be trusted.
BB Netanyahu and Trump are running the U.S. straight into the ground!
The medical cpi results are an obvious outrageous deliberate lie. How much are they deliberately lying about the other figures. The financial media never call them out on this. Economic politburo rules.
Medical CPI did not increase because of the 1.2 million people who dropped ACA coverage and the 3.3 million people dropped from Medicaid.
Trump is desperate to beat Biden at something so I guess it will be the inflation number.
Got exit strategy?
Imagine being a worse president than Biden was in his last two years. Ouch!
Trump is not only worse than Biden in his last 2 years, he’s worse than Trump was in his first 4 years. He’s the worst president this country has ever seen fit to elect twice!
Obviously you haven’t heard the news, we’re the hottest country right now.
To be fair, Trump didn’t make it obvious he was talking about inflation.
From the BLS:
Final PPI up 1.4% in April.
Services up 1.2% in April.
Goods up 2.0% in April.
Then they have the audacity to report that prices for final demand are up only 6% over the last 12 months.
I want to hear from the coffee clutch next Monday! Full report!
Coffee clutch is mostly disbanded this time of year. Most farmers are too busy. Sunday after church chats are the tell and only a few MAGA hats are seen. I’d say that about a third of Trump supporters have fallen away but the two thirds that remain are stalwart and dug in.
Some of the talk after church last Sunday was a bit bizarre: Prices of fuel and fertilizer are “fixed by the big corporations” and not Trumps doing. Trump is doing Gods work and he should eradicate Irans people entirely. Lots of projecting nuclear fears ~ as if they were reality based.
Another discussion was about how politics, ICE and potential food shortages are going to cause riots this summer in the cities. Chatter about groups banding together (mini-militias) to defend farms/homes from the outflow of blue scumbags from the cities if things go bad.
When I pointed out the potential for billions of West Asians to be starving from the reduction/failure of the rice crop there was no sympathy from the males. Better protect our borders was the consensus.
As for me? I’m keeping my head down and keeping my finger on the pulse of my land. Posting when I have a moment to vent…
Lol. As if these clowns can fend off 2 million+ angry hungry people heading out to the farms. They’ll be lucky if they don’t get skinned alive, everyone in the city knows who and where the Trump supporters are and where food can be found…
Remember cities are dangerous with all those gangbangers, cartels, ms13, illegals, and of course socialist democrats. Since all those farms receive government subsidies, technically they belong to the people!
There is no escape unless you have an exit strategy.
MEAL TEAM SIX ASSEMBLE!
It has been said that anarchy is only three missed meals away.
Myself? I think it is more than that.
3 missed meal are chaos. 9 missed meals or 3 days without food is anarchy
Most Americans I have seen on my coast to coast travels before darkness descended there need to miss at least 3 meals, an hour. IMHO.
Obesity is direct connection to the quality of the nation’s food supply. You are conflating that people in vast swaths are overeating. But in fact what they are suffering from is eating processed foods because they can’t afford to eat quality food.
The US supermarkets I have been to over many years have fantastic selections of fruit and veg in abundance. You can’t force people to purchase it. I understand bread does not go bad for a week or two there due to additives, bread here goes bad within a few days if not consumed. US ‘soda’s’ are ridiculously sweet compared to their European counterparts.
Plenty of inexpensive healthy food at grocery stores like fruits and vegetables, oats, beans and rice, potatoes, chicken, tuna, pasta, etc. People just need to do some basic preparation.
Diesel went up another 29 cents overnight to $6.79 and that represents a 100% increase since the election.
Who does Trump work for?
Trump and Israel, in that order.
Diesel. Who needs it? Electric tractors are the present.
Trump works for Bibi.
Just imagine what’s going to happen if they admit the COLA for the year is 6%. It means all the things tied to COLA (union raises, social security increases etc) are going to go up by 6% next year which is really going to turbo charge things in 2027.
Ouch!
If reported accurately, it will be higher.
Even worse is that the govt will have to raise entitlements also. This is why they lie about the actual figures. Like the wolf guarding the chicken coop
The shelter inflation isn’t as worrying when you dig into it a bit. That’s not to say it’s good – it most definitely is not – it’s just not as bad as the number makes it look. Since the shutdown in October meant that one of the survey panels didn’t actually happen and resulted in an understatement of housing inflation, that same panel in April all of the sudden gets surveyed and a full year’s worth of rent growth for that panel gets lumped into April resulting in an overstatement in April.
What’s the real number? God only knows. The only thing you can say is that it’s not as bad as the published number.
We do have YoY numbers and they are up though obviously not as much as the inflated MoM number.
https://tradingeconomics.com/united-states/rent-inflation
That explanation does not fly very well. Month-over-month was not impacted by the shutdown. We had reports in December, January, February, and March. April jumped unrelated to what you said. Shelter D 0.38 J 0.22 F 0.23 M 0.27 A 0.61
When it comes to food inflation over the next year, another factor that needs to be considered is the record breaking el nino which is developing. All of the models now project that this will be at least in the category of a super el nino (+2 degrees), and many now suggest a record setting el nino (+3 degrees). The effects of a super el nino are complex and differ around the world, but on a global basis the yields of rice, wheat, cocoa and coffee decrease (so expect weather related inflation to come in those commodities) while yields of soybeans increase (so some offsetting deflation there). A trip to the grocery store is going to get even more expensive this fall/winter.
Predictive models don’t handle extremes well and your certainty does not reflect the probabilities associated with the data at this time. Also, various models predict conditions in different domains (e.g. different geographic regions of the Pacific).
That said, it would appear that weather impacts will pile onto geopolitical impacts and make things worse for consumers this winter.
https://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/figure08.gif
Another example-
Figure 1 shows temperature deviations >2C, but note that there is still a 30% chance of the observed deviation falling outside the yellow boxes. It isn’t specified where the other 30% would fall, but some portion of that would be below 2C.
https://ds.data.jma.go.jp/tcc/tcc/products/elnino/elmonout.html#fig1
NOAA has the probability of a super el nino at 25%, but I believe the European models more than NOAA, and ECMWF has the probability of a super el nino at >50%.and higher. We’ll have to wait to see.
The fertilizer shortage will also affect yields.
Mish there is a third. You forgot trumps rage.
I considered that
The implications of yesterday’s CPI number combined with today’s PPI is that the Fed is behind by at least two quarter point rates hikes.
To clarify, the current inflation rate is 4% but the effective federal funds rate is at 3.5%-3.75%. That means real interest rates are currently negative, which means people get paid to borrow money, which exacerbates the inflationary feedback loop. With one quarter point rate hike, real rates would still be negative.
PPI even hotter than CPI, Rate cuts?
Inflation is transitory! Lol. 32% chance of rate HIKE in December, 59% chance of a rate HIKE in April.
Cutting rates now would be pure lunacy.
Lunacy is the specialty of clowns, and clowns run the US now.
@TheGarlandNixon
BREAKING NEWS: White House insiders leak that President Trump has taken the hardline position that either Iran will bow to his demands or he will finish losing the war, crashing the US economy, and obliterating his presidency.’
The economy is already crashed.
April PPI triple expectations!
1.4% vs 0.5% est.
2 year treasury above 4% now! bwahahahahaha.
Oh the humanity!
“It’s Trump turtles all the way down and inflation all the way up!”
Kenny Rogers knew when to hold them and to fold them. Kenny was smarter than Trump.