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Core Inflation Jumps Most Since October Due To Rent, Healthcare Costs
Following February's big bounce back MoM, Consumer Prices in March rose 0.2% MoM (less than the expected 0.3% rise) but it is YoY that is the great news for Americans. CPI fell 0.1% YoY in March (below expectations of unch) which means Consumer Prices haven't risen YoY in 3 months. However, while this clear disinflationary signal is peersisrtent, Core CPI continued to rise 1.8% from last year (above the 1.7% consensus) driven by big jumps in the cost of shelter (thank you Fed) and healthcare (thank you Govt); which should send shivers through the risk-bulls as The Fed may be forced to pull rate hikes forward.
Consumer prices have not risen in 3 months..
The monthly change:
On an annual basis, there is now a huge divergence between Core and Headline CPI, mostly as a result of dropping energy prices impacting the headline data:
The full breakdown...
With Core CPI surging due to Shelter and Healthcare...
The index for all items less food and energy has risen 1.8 percent over the past 12 months, a slight increase from the 1.7 percent increase for the 12 months ending February. Over the last 12 months, the shelter index has risen 3.0 percent, while the medical care index has increased 2.5 percent. The indexes for used cars and trucks, for apparel, and for airline fares have all declined over the past year.
As for food and energy:
The food index declined 0.2 percent in March after a 0.2-percent increase in February. The index for food at home turned sharply down in March, falling 0.5 percent. Five of the six major grocery store food group indexes declined. The fruits and vegetables index posted the largest decrease, falling 1.4 percent, its third decline in a row. The index for nonalcoholic beverages, which rose 0.6 percent in February, fell 0.6 percent in March. The index for dairy and related products fell 0.5 percent, as did the index for meats, poultry, fish, and eggs. The index for beef and veal, however, rose for the fourteenth month in a row, increasing 0.1 percent. The index for other food at home fell 0.1 percent in March after rising in February. The only major grocery store food group index to increase in March was cereals and bakery products, which increased 0.4 percent after declining in February. The food at home index has increased 1.9 percent over the past 12 months. Five of the six groups have risen over that span, with meats, poultry, fish, and eggs increasing the most, at 6.0 percent. The fruits and vegetables index, however, has declined 1.1 percent over the last 12 months. The index for food away from home rose 0.2 percent in March and has increased 2.9 percent over the past 12 months.
The energy index rose 1.1 percent in March after increasing 1.0 percent in February. The gasoline index increased 3.9 percent in March, its largest increase since February 2013. (Before seasonal adjustment, gasoline prices rose 10.5 percent in March.) The fuel oil index also rose in March, increasing 5.9 percent. In contrast, the index for natural gas declined 2.7 percent, and the electricity index fell 1.1 percent. Over the past 12 months, the electricity index has increased 0.9 percent, while the other energy indexes have sharply declined. Despite the March increases, the gasoline index has fallen 29.2 percent over the last 12 months, and the index for fuel oil has decreased 24.9 percent. The index for natural gas has also declined over the span, falling 14.4 percent.
Ex food and energy monthly:
The index for all items less food and energy increased 0.2 percent in March. The shelter index increased 0.3 percent, with the indexes for rent and owners' equivalent rent both rising 0.3 percent and the index for lodging away from home increasing 0.4 percent. The medical care index, which was unchanged in February, rose 0.3 percent in March. The index for medical care services rose 0.4 percent, with the indexes for physicians' services and for hospital services both rising 0.6 percent after declining in February. The index for used cars and trucks increased 1.2 percent after rising 1.0 percent the previous month. The apparel index rose 0.5 percent in March, its third consecutive increase. Also rising in March were the indexes for new vehicles, for alcoholic beverages, and for household furnishings and operations, all of which increased 0.2 percent. The tobacco index rose 0.4 percent, and the index for recreation advanced 0.1 percent. The index for airline fares, in contrast, declined 1.7 percent in March after rising in February.
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pull rate hikes foward, that's a good one!
Yeah, you know. Pull them forward from 'never' to one year before that.
"driven by big jumps in the cost of shelter (thank you Fed) and healthcare (thank you Govt); which should send shivers through the risk-bulls as The Fed may be forced to pull rate hikes forward."
Yes, I can totally see how raising rates would slow the cost increases of heath care (government mandated) and housing (don't like a 10% bump in your rent every year? Tough. There's the street. Pack your shit and go).
This is how central planning manifests itself.
Just wait till California can't plant
I can't wait for them to die of thirst. California is and always has been a cursed land. The indians there never developed much of anything or collected the gold from the streams. When the Europeans arrived they told them they believed that land and gold was possessed by demons. They were right.
You Non-Californians seem to think about us an awful bunch. And if you're judging a people by it's so-called elected leaders all of America is just as bad as you perceive CA to be. Whatever makes 'yall feel better about yourselves...
Don't worry calidude that is just 'the butthurts' section of zerohedge, they are experts on why all the blue states suck, why the gop is the best party (although they aren't republicans, they just overlap!!), why we should all be grateful peons of a fascist rightwing bankster government, why the 60/70s were the best decades and why young people today are not as good as them when they were young.
They would also be great for advice on erectile dysfunction pills, reagan gushing flaccid fucks.
Just wait till California can't plant
"Yes, I can totally see how raising rates would slow the cost increases of... and housing...".
They have to burst Housing Bubble 2.0. As soon as those REITs and the late to the party RE specuvestors start liquidating, inventory increases, people can buy and rents adjust lower. They accomplished their goal of getting inventory off the banks books and into private equity. It was just a matter of the REITs selling shares and securities and the lower level flipping to find the greatest fool knife catcher. Mission accomplished on all fronts.
Bingo.
If they raise rates, families move straight into cardboard boxes underneath the overpass...
No way to mandate healthcare to the homeless.
Perfect. More technology jobs being outsourced overseas to reduce costs, while living costs in the US climb.
Tuition and Government Pay .... never decline !
Time to pass a few more omnibus Affordable X Acts.
'Healthcare costs' up but healthcare delivery down. People cannot affrord the huge Obamacare deductible. Plus, many doctors do not even accept any type of Obamacare.
You are more likely to go bankrupt NOW than before Obamacare...odd that...almost like it was by design.
Your down voter obviously unaware of the #1 cause of ch 7
The only measure are wages....and they aren't going anywhere. Money printed directly into the pocket of Wall Street and the Richest....does nothing and we are just marking time to the Final Event! .Central Bankers have all had a Goldman Lobotomy! Bernanke showed his cards...and should be arrested!
True. My banker is refurbishing his yacht this summer and a new BMW for his daughter.
Yup raise rates because inflation is up due to stuff people are forced to spend their money on!!! What a feckin mess
Rents and healthcare - non-discretionary must have categories are up. Talk about hitting the poor & middle class harder.
unrelated to this thread. Radio station in Philly is streaming Grateful Dead commercial free in celebration of the 50 years of the band.
Suggest you bookmark the station - best radio station I've ever found.
http://www.xpn.org/
Thx for the heads up about the Dead show!
All part of the central planning strategy = chaos
Hottest inflation... SINCE LEHMAN!
This does not matter, Dow up another 200 points please!
I rent a house and the dink landlord has raised rent by $300 in the last 3 years. If I leave, he said, he'll then ask another $200 on top of what he has already raised it for the next person.... It can't continue. Of course, he is a gov worker, so he probably thinks the economy is great.
Amazing. He looks around and thinks he can get it. I think it's time to go back to renting an apartment or build something small on my own land. Just need a shop to work out of.
Your landlord is a 'dink' because he's charging a market rate?
He's a dink for many other reasons. I understand market rate and that's my point. It can't continue - people are renting because they can't buy, but rents are going up so much, soon, rent will be unaffordable as well.
Sounds like a job for another government plan: The Afforable Housing Act.
You know, fashioned after Obamacare: you are forced to take out a mortgage to buy a house or face stiff penalties. Subsidies for everyone except the middle class, something along those lines...
He is a dink because he makes money from producers by doing a gov job that is likely of no importance. So yes for him to turn screws on the guy paying part of his salary is angering.
Howd those earning do last month?.....what do you mean they declined again?! Do to a decline in the work week?! Must be the Russians...
Won't raising the rates crush BofA? That would be a shame. Or is it sham?
FED won't raise rates. They will keep jawboning it around and around and around...in 12 different ways.
I spent $750 on healthcare this month and I have 3 free healthcare insurances that are excellent. My decision to go partially bionic. Poor people got nothing coming.
"...Consumer Prices haven't risen YoY in 3 months." Maybe the prices havent risen but the packages sure have shrunk.
It would seem the more I take it in the shorts, the better the economy.
I feel like pinata in cat in the hat.