What "Low-Flation"? Core CPI Jumps Most In 3 Years As Food Costs Push Higher

Tyler Durden's picture


The Fed is losing its reasons for printing, leaving it desperate to revive the meme that the US economy is in self-sustaining recovery mode. At 2.0% Core CPI has caught up with the hot-flation of PPI removing the crutch of low-flation easement the Fed has been relying on. While Ex-Food-and-Energy is surging (well above expectations), the food index rose 0.5% in May after increasing 0.4% in each of the three previous months; and the index for food at home increased 0.7%, its largest increase since July 2011. This is all happening against a backdrop of real hourly wages dropping 0.1% YoY.


Does this look like the Fed has inflation concerns under control?


Driven by "Food at Home" costs soaring...


Full Breakdown


The bottom line is that The Fed just hit its inflation target (in fact it exceeded it) and along with reaching its employment target (which has now been changed), there are very few defensible arguments for them to stay so easy - aside from saving us all from a fate worse than death, falling asset prices...

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Tue, 06/17/2014 - 08:45 | 4864426 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Let them eat iPads?

Tue, 06/17/2014 - 08:46 | 4864429 Headbanger
Headbanger's picture

Road kill..

Tue, 06/17/2014 - 08:58 | 4864452 Chris Jusset
Chris Jusset's picture

This is the "published" figure that includes fudging, massaging, and fraud.  The actual CPI number is closer to 10%.  The US Bubble Economy has no choice but to continue to pretend that there is no inflation in order to justify ultra-low interest rates ... but now, after 5 years of fraud and fudging, the truth can no longer be concealed.

Tue, 06/17/2014 - 09:10 | 4864500 NidStyles
NidStyles's picture

All of this makes me want to vomit.

Tue, 06/17/2014 - 09:17 | 4864540 gmrpeabody
gmrpeabody's picture

Slam them PMs lower....

Tue, 06/17/2014 - 09:31 | 4864614 pods
pods's picture

Everyone alive sees this. A "quick trip to the store" is $100 bucks. Forget a trip to the wholesale club. Those are 4-5 hundred.


Tue, 06/17/2014 - 09:57 | 4864748 HardAssets
HardAssets's picture

Yep . . . when I feel like indulging in a fast food fix and go to the local (family owned) burger joint its over 10 bucks for burger, fries, and a drink.  Sheesh . . .

Tue, 06/17/2014 - 11:12 | 4865041 Supernova Born
Supernova Born's picture

Chicken McNuggets in every potbelly and channel-stuffed cars rusting in every vacant lot.

Tue, 06/17/2014 - 11:35 | 4865203 graneros
graneros's picture

I know and most here know food is through the roof but you wouldn't know food is expensive by looking around America.  Restaurants are full to capacity every day including several different types of all you can eat buffets.  Pay attention next time you go out to eat.  Take a look at the the vast amounts of food left on plates and then tossed in the garbage. Look in your own home at how much food your own family wastes. 

My wife and I shop at 3 different food stores when we go to town. Yes we shop at Walmart.  In fact it is first on the list because we buy nothing there that requires refrigeration.  We know what is cheaper at Walmart and buy it.  Next stop is one of the big food store chains.  Here in Colorado one of the biggest and the one we use is King Soopers (Kroger owned).  We buy some food here and as much organic as we can.  The big name food stores are all stocking more and more organic now which is a good thing.  Lastly and most expensively we shop at the organic food store called Vitamin Cottage.

Eating organic meat is very expensive but one can still afford to do so with proper  planning.  Buy in bulk when you can and if you can store it it.  Know how much you are going to use for each meal and repackage accordingly. Repackaging is the first thing we do when returning from shopping.  Take that big package of brats or Italian sausage and turn it into several bags of 2 each and freeze. Turn those big packages of ground beef and pork into managable 1/4 pound bags. Eating organic is expensive but if you cut fast food chains out of your diet you can afford to eat good organic food and even have a little extra cash left over.

One of the biggest things to cut down your food bill (plus it'll improve your health) is to not buy those bags of frozen microwavable garbage. That crap is so over priced and so bad for you.

Everyone in America could cut there thier food costs by a substatial amount just by changing habits.  I understand the time constraints many of us operate under and the ingrained habits caused by the way we now live but times are changing rapidly and a lot of our wasteful and modern American habits are gonna have to go by the wayside whether we like it or not.

Tue, 06/17/2014 - 16:27 | 4866588 MisterMousePotato
MisterMousePotato's picture

You forgot: "Read Square Foot Gardening" by Mel Bartholomew.

Wed, 06/18/2014 - 01:06 | 4868013 kareninca
kareninca's picture

That is a great book.  The technique works; I've tried it.

Tue, 06/17/2014 - 09:53 | 4864728 HardAssets
HardAssets's picture

With the high cost of food, youre gonna vomit ?

NO way I'd do that . . . . I paid plenty for that food and its staying down !

Tue, 06/17/2014 - 09:01 | 4864460 jbvtme
jbvtme's picture

re: the cpi index...the weatherman telling the algos which way the wind is blowing. dylan would be so disappointed. as would jesse livermore.

Tue, 06/17/2014 - 08:54 | 4864448 yogibear
yogibear's picture

William Dudley's solution.

Tue, 06/17/2014 - 08:48 | 4864432 LawsofPhysics
LawsofPhysics's picture

Faith in the old system is slipping.  Hey, this is a good thing.  For example, the farmer's markets just keep getting bigger.  The power may return to those who actually know how to do or make something real after all.  Fuck the useless paper-pushers.

"Full faith and credit"

tick tock motherfuckers

Tue, 06/17/2014 - 09:32 | 4864619 pods
pods's picture

Never had a better feeling spending money than when at a farmers market.


Tue, 06/17/2014 - 09:46 | 4864692 LawsofPhysics
LawsofPhysics's picture

My tribe and I thank you for the support...

Tue, 06/17/2014 - 10:10 | 4864788 pods
pods's picture

The thanks are very much reciprocal.


Tue, 06/17/2014 - 08:48 | 4864433 madbraz
madbraz's picture

Has CNBC bought zerohedge?   What a shame.



Tue, 06/17/2014 - 08:57 | 4864458 fonzannoon
fonzannoon's picture

whats the prob madbraz? seems spot on. money velocity has gone to total shit. Rising food and energy costs are causing deflation. Wages are falling. housing is going to shit. fiscal policy has left the building. the only thing left to do is stick a giant "mission accomplished" sign in the ground and start raising rates.....and pray.

Tue, 06/17/2014 - 09:32 | 4864621 Quinvarius
Quinvarius's picture

"Rising food and energy costs are causing deflation."

I have seen some hard core deflationists who won't accept the hyperinflationary reality, but this takes the cake.

Tue, 06/17/2014 - 09:35 | 4864641 GetZeeGold
GetZeeGold's picture



Who can afford food with an Obamacare job?

Tue, 06/17/2014 - 10:23 | 4864827 HardAssets
HardAssets's picture

Do you mean 'job', or . . . . 'jobs' ?

My 20 year old nephew needs to have three separate jobs to get by. Employees won't put people on full time because of the added costs. So, they hire a bunch of part timers with limited hours.

And, of course, the demo-republicraps are working hard to bring in more illegals which will further lower wages and job opportunities for Americans. That may lead to more conflict among various competing groups of people - fodder for the Divide & Conquer strategy.

TPTB have been gunning for America since 1776. Can't have a bunch of uppitty serfs (who think they are free men)  get out of line, ya know ?  They want their new world order and the American middle class citizenry needs to be impoverished and only focused on their day-to-day survival to make that happen.

Tue, 06/17/2014 - 12:37 | 4865505 sschu
sschu's picture

"Rising food and energy costs are causing deflation."

Not sure what this means, please explain.  I thought deflation is an increase in the buying power of money, not the opposite.


Tue, 06/17/2014 - 12:55 | 4865580 greatbeard
greatbeard's picture

>> Not sure what this means,

If I had to take a guess, if he's serious, I'd say with wages stagnant, and food and energy taking a larger bite out of people's budgets, there is less available to spend on other discressionary items, forcing their price down.

Tue, 06/17/2014 - 13:00 | 4865593 sschu
sschu's picture

There was an idea floating around here years ago of bi-flation, or inflation in those things you need (like food) but deflation in luxury items (like Ipads and fancy phones).  It seems "bi-flation" is more descriptive. 

It is difficult to see right now how we are experiencing a 1930s like deflation.  Maybe someday, but certainly not right now.


Tue, 06/17/2014 - 17:48 | 4866920 fonzannoon
fonzannoon's picture

100% correct.

Tue, 06/17/2014 - 12:58 | 4865587 Peak Finance
Peak Finance's picture


"Rising food and energy costs are causing deflation."

I think he specifically means price deflation in this case, not monetary.

Meaning that a person pays so much for food and fuel now they don't have the dough to buy chinese trinkets or the new air jordans etc. from Whatever-mart, and therefore those prices on hard (durable) goods drop.

Tue, 06/17/2014 - 13:08 | 4865630 sschu
sschu's picture

This is clearly the case, but not sure this translates into the defintion of deflation.  It is difficult to see that we have less money in circulation now, although the "velocity" or turnover of this money is lower.  It is difficult to see how they know these things.  :-)


Tue, 06/17/2014 - 17:48 | 4866919 fonzannoon
fonzannoon's picture

For anyone still left around, food is imperative. People need to eat no matter what. So they will pay whatever the cost for food. That leaves less dollars for everything else. Basically the same goes for Energy. That is why rising food costs are in actuality deflationary. Unless you get wage inflation, at which point we can go full retard hyperinflation. That ain't happening. yet...

Tue, 06/17/2014 - 08:49 | 4864436 RiskyBidness
RiskyBidness's picture

Yellen's Glory Hole will save the day tomorrow.  BTFD!! Get your free blow job while you can!!

Tue, 06/17/2014 - 08:53 | 4864441 rsnoble
rsnoble's picture

I wouldn't put my dick anywhere near that snaggletooth methhead.  Seriously she does resemble some of the after-meth photos i've seen.

Tue, 06/17/2014 - 10:22 | 4864851 Farqued Up
Farqued Up's picture

Yellen = Snowdyke

Tue, 06/17/2014 - 08:50 | 4864438 rsnoble
rsnoble's picture

The opening sentence needs one word added to it:

"The Fed is loosing it's 'bullshit' reasons for printing, ....."

Tue, 06/17/2014 - 10:48 | 4864781 HardAssets
HardAssets's picture

rsnoble:  "The Fed is losing it's 'bullshit' reasons for printing, ....."

Aint that the truth.

The criminal gang money cabal called the 'fed' has devalued the US dollar by over 97% over the last century by their fiat 'money' printing. And yet they have the gall to use 'deflation' as an excuse to further line the pockets of their private owners.

They set up the fed about a century ago, set up income taxes (the American people as collateral for govt 'debt' to private banksters), and took over public 'education' about a century ago.

Smell a rat ?

Tue, 06/17/2014 - 08:51 | 4864439 Bill of Rights
Bill of Rights's picture

Prices go up Gold goes down, Prices go down Gold goes down. The games London and the COMEX are playing are so obvious.

Tue, 06/17/2014 - 09:02 | 4864442 Dr. Engali
Dr. Engali's picture

Never fear, chain CPI will soon be introduced into inflation calculations and that will fix everything. Print away BernankenYellenStein.

Tue, 06/17/2014 - 08:53 | 4864443 Quinvarius
Quinvarius's picture

The gold derivative shorts, who have never made a correct macro prediction, had to come on strong after that.  They are just selling because they have to now. 

Tue, 06/17/2014 - 08:53 | 4864445 madcows
madcows's picture

Irwin Keller says its the Tea Party's fault.

Tue, 06/17/2014 - 08:59 | 4864462 Bill of Rights
Bill of Rights's picture

This from a Government that just lost two years of emails, trust no one.

Tue, 06/17/2014 - 09:13 | 4864525 CH1
CH1's picture

trust no one

Trust government least of all.

Tue, 06/17/2014 - 08:56 | 4864456 Gringo Viejo
Gringo Viejo's picture

...but the cockaroaches will survive. That's gotta count for something.........

Tue, 06/17/2014 - 08:57 | 4864457 the not so migh...
the not so mighty maximiza's picture

this is the stuff recoveries are made of

Tue, 06/17/2014 - 09:05 | 4864481 NoWayJose
NoWayJose's picture

Food prices were up long before this and are up a lot more than these numbers show. Since the numbers are simply made up to please the masters, and importantly are Y-over-Y numbers, I get suspicious when they let the charts rise. Just like after the 2011 rise, I can only suspect that they want to use these numbers on the back side of the rise in order to show falling prices next year. Given that it is a election year, I can see them juicing the CPI numbers in order to boost the government Bennie checks. The. Next year they can use the falling numbers to save us from deflation.

Tue, 06/17/2014 - 09:08 | 4864490 edifice
edifice's picture

Who else here can't really afford to buy meat, anymore? I mean, good-quality meat, not pink slime from the Kroger-branded store. I am now buying mine from the CSA; it is the only way to buy it at any sort of sane price.

Tue, 06/17/2014 - 09:11 | 4864509 rsnoble
rsnoble's picture

I live in the country and near very small towns and can still get better prices than such place like walmart.  Not nearly as cheap as a couple years ago for sure but significantly less than the alt.  I know it was a matte of time before pork went up.  It seems anything cheap is a concentration area for them to get it priced high.

Tue, 06/17/2014 - 11:36 | 4865208 BeerMe
BeerMe's picture

Helps to have a freezer and buy half a cow at a time.  Also helps to know some ranchers.  Bacon prices are what are starting to get me. 

Lately easy money seems to be flowing into commodities more and more.

Tue, 06/17/2014 - 12:20 | 4865447 edifice
edifice's picture

I do and I'll buy whole salmon when it's in season and on sale, freeze it, and have it all year. Bacon prices are getting to me, too. I paid almost $20 for 25 slices of thick-cut bacon, the other day. Ridiculous.

Tue, 06/17/2014 - 09:09 | 4864498 timmeh
timmeh's picture


Tue, 06/17/2014 - 09:52 | 4864709 machineh
machineh's picture

Feeder cattle, bItCHeZ.


The Hildebeast is buying.


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