The BLS Consumer Price Index summary shows the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in May on a seasonally adjusted basis after rising 0.2 percent in April.

Details

  • The gasoline index increased 1.7 percent, more than offsetting declines in some of the other energy component indexes and led to a 0.9-percent rise in the energy index.
  • The medical care index rose 0.2 percent.
  • The food index was unchanged over the month.
  • The shelter index rose 0.3 percent in May.
  • The indexes for new vehicles, education and communication, and tobacco increased in May, while the indexes for household

    furnishing and operations, and used cars and trucks fell.
  • The indexes for apparel, recreation, and personal care were unchanged.

Year Over Year CPI

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Year-Over-Year CPI looks like it's on on ominous trend buts that largely due to easy comparisons and rising energy prices. Year-over-year food at home is up only 0.1%. Some will object to that, I don't.

Food away from home rose 2.7%, likely reflecting higher wages.

The problem spot is shelter, and it's a big one. The shelter index is up 3.5%.

Month-Over-Month CPI

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Month-over-month, the CPI looks more benign but once again shelter is hot. It's up 0.3% for the month.

Worse yet, shelter is understated in the CPI because it does not include actual housing prices.

Big Yawn

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The bond market reacted to this news with a big yawn.

Other than shelter, a big yawn is appropriate. The Fed blew another real estate bubble, junk bond bubble, and equity bubble. When those pop, deflation, not inflation will be the concern.

Mike "Mish" Shedlock