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Year-Over-Year CPI Jumps 5%, That's the Most Since August 2008

The CPI surged more than expected month-over-month in May leading to the biggest year-over-year jump in over a decade. Gasoline is up the most since 1980.
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CPI Year-Over-Year Percent Change NSA 2021-05

The BLS reports the Consumer Price Index increased 0.6 percent in May on a seasonally adjusted basis after rising 0.8 percent in April.


  • CPI rose 0.6% month-over-month in May seasonally adjusted
  • CPI rose 5.0% year-over-year in May not adjusted
  • The index for used cars and trucks continued to rise sharply, increasing 7.3 percent in May. This increase accounted for about one-third of the seasonally adjusted all items increase.
  • The index for all items less food and energy rose 0.7 percent in May after increasing 0.9 percent in April.


  • The price of energy was flat in May but up 28.5% year-over-year.
  • The gasoline index rose 56.2 percent since May 2020.
  • The May 2021 gasoline increase was the largest 12-month increase since the period ending April 1980.
  • The index for electricity increased 4.2 percent over the last
  • year, while the index for natural gas rose 13.5 percent. 


  • The food index increased 0.4% in May. 
  • The index for food at home increased 0.4%, the same increase as in April.
  • While the April index was broad-based, with all six major grocery store food group indexes rising, the May increase was mostly due to the index for meats, poultry, fish, and eggs, which increased 1.3% over the month. 
  • The beef index rose 2.3% in May, its largest increase since last June. 
  • The index for cereals and bakery products rose 0.5% in May, and the index for dairy and related products increased 0.4%. 
  • The food at home index increased 0.7% over the past 12 months. Five of the six major grocery store food group indexes increased, but the index for fruits and vegetables was the only one to rise more than 0.6 percent; it increased 2.9%.
  • The only index to decline was nonalcoholic beverages, which fell 0.2% over the last 12 months.

All Items Less Food and Energy

  • The index for all items less food and energy rose 0.7% in May following a 0.9% increase in April. 
  • The index for used cars and trucks continued to rise sharply, increasing 7.3% in May after a 10.0% increase in April. 
  • The shelter index rose 0.3% in May. 
  • The index for rent rose 0.2% and the index for owners’ equivalent rent increased 0.3%.
  • The index for lodging away from home, which rose 7.6% in April, increased 0.4 percent in May.
  • The household furnishings and operations index increased 1.3% in May, its largest monthly increase since January 1976. 
  • The indexes for domestic services and for furniture and bedding were among the component indexes contributing to the increase. 
  • The index for new vehicles rose 1.6% in May, its largest 1-month increase since October 2009. 
  • The index for airline fares continued to increase, rising 7.0% in May after increasing 10.2% the prior month. 
  • The apparel index also rose in May, increasing 1.2%.
  • The index for car and truck rentals continued to rise, increasing 12.1% after rising 16.2% the prior month. 
  • The index for recreation rose 0.2% percent in May following a 0.9% increase in April. 
  • The motor vehicle insurance index advanced 0.7% in May after increasing 2.5% prior month. 
  • The medical care index declined 0.1% in May after rising in each of the 4 previous months. 
  • Medical care component indexes were mixed. The index for prescription drugs declined 0.3% in May after rising 0.5% in April. The hospital services index increased 0.2%, while the physicians’ services index was unchanged. 
  • The index for all items less food and energy rose 3.8% over the past 12months.
  • The index for used cars and trucks increased 29.7% over the past 12months.
  • The index for motor vehicle insurance rose 16.9%. 
  • The index for new vehicles rose 3.3% over the past 12 months, its largest 12-month increase since the period ending November 2011.

Owners' Equivalent Rent

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OER (bold bullet point above) is the largest component of the CPI with a weight of 24.263%. 

It is a measure of what homes would rent for if homes were indeed rented. Home prices are not in the CPI. 

Debatably, homes are not a consumer item. So what. Tell the person seeking to buy a home that shelter is only up 2.2% from a year ago. 

The Fed and BLS is making a serious mistake, again, regarding inflation by ignoring housing prices.  That mistake led to the 2007-2010 house price crash and Great Recession.

Yet, even without a proper measure of housing, prices are up 5.0% from a year ago.

For now, the economy is running very hot. Bubbles abound. 

The Fed, a collection of groupthink fools, is pleased. Consumers aren't.

Note How the Fed's Inflation Policies Benefitted the Top 1% In Pictures Part 1.

Part 2 is later today.


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