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Consumer Prices Rise At Slowest Pace Since 2014 As Airfares Plunge, Car Costs Slide, But 'Rents' Jump

Tyler Durden's picture




 

US Consumer Prices (CPI) missed expectations MoM with a mere 0.1% rise (half the expected 0.2% rise). Core CPI (ex food and energy) rose just 0.1% - its weakest growth since Dec 2014 with the biggest drivers being a 5.6% plunge in airfares - the biggest drop since 1995 and a 0.3% surge in 'owner equivalent rents' driven by lodging. Gas prices rose for the 3rd consecutive month (unequivocally good?) but new and used car prices tumbled.

Core CPI rose at slowest pace since Dec 2014...

 

As Airfares collapsed at the fastest pace in 20 years..

 

Breakdown...

 

The index for all items less food and energy increased 0.1 percent in July following a 0.2-percent increase in June. The shelter index rose 0.4 percent, its largest increase since February 2007.

The indexes for rent and owners' equivalent rent both increased 0.3 percent, while the index for lodging away from home increased 2.5 percent after falling in May and June. The apparel index also turned up in July, rising 0.3 percent after declining in each of the last 3 months. The index for medical care rose slightly in July, increasing 0.1 percent, with both the medical care services and medical care commodities indexes advancing 0.1 percent. Several indexes were unchanged in July, including those for personal care, recreation, alcoholic beverages, and tobacco.

 

The index for airline fares declined sharply in July, falling 5.6 percent, its largest decline since December 1995. The index for used cars and trucks fell for the third month in a row, declining 0.6 percent, and the index for household furnishings and operations fell 0.2 percent, also its third straight decline. The new vehicles index, which had increased five months in a row, also fell 0.2 percent in July.

*  *  *

This is not what the Fed ordered but is not bad enough to warrant a hawkish tone.

 

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Wed, 08/19/2015 - 08:41 | 6443128 Cognitive Dissonance
Cognitive Dissonance's picture

Is this bullish or bearish......or just bullshit?

Wed, 08/19/2015 - 08:49 | 6443150 JungleCat
JungleCat's picture

Probably the latter. There is no reason to trust their numbers.

My costs are going up, that is all I know. Food, health insurance, electricity etc. etc.

Wed, 08/19/2015 - 09:23 | 6443270 holdbuysell
holdbuysell's picture

Yup, see the Chapwood Index.

Wed, 08/19/2015 - 10:37 | 6443547 rejected
rejected's picture

Yea,,, Averaging 9-11 percent.Seems more realistic.

Wonder why the down arrows? Maybe that is the reason many of my favorite posters are no longer posting?

Maybe the Tylers ought to consider doing away with them, then if someone disagrees they would be forced to reply.

Wed, 08/19/2015 - 08:49 | 6443151 pods
pods's picture

I think this is bullshittish.

Wed, 08/19/2015 - 08:49 | 6443153 papaswamp
papaswamp's picture

Bullearshit

Wed, 08/19/2015 - 08:42 | 6443134 Last of the Mid...
Last of the Middle Class's picture

Get a diploma, go to the big city, work 85 hours a week for Amazon, pay $2000/month for one room apartment. The new normal my friends.

Wed, 08/19/2015 - 08:52 | 6443160 scatterbrains
scatterbrains's picture

If you have the time to reflect on your situation and post about it here you're not working hard enough.. get back to work.

Wed, 08/19/2015 - 08:44 | 6443139 madbraz
madbraz's picture

five year yields fall rationally to 1.55% on the news, only to be immediately pumped straight up to 1.59%.  NY FED?

Wed, 08/19/2015 - 08:48 | 6443143 papaswamp
papaswamp's picture

June earnings revised down making the July rise a wash. Stagflation except in shelter and healthcare.... And tax preparation costs...+5% rise. Nothing like getting fucked so you can get fucked.

Wed, 08/19/2015 - 08:47 | 6443146 youngman
youngman's picture

Airfares might have dropped..but the extra charges have skyrocketed....total costs are up

Wed, 08/19/2015 - 09:15 | 6443227 Mike Honcho
Mike Honcho's picture

I bought a 1 way ticket on Monday, it didn't feel like a price in a plunge.

 

And yea it was about 50/50 for ticket price and taxes/fees.

Wed, 08/19/2015 - 08:49 | 6443154 ejmoosa
ejmoosa's picture

The difference between consumer prices and actual consumption prices is large.

 

Consumer prices -unsellable inventories = Consumption prices.

 

Unsellable inventory prices are falling while consumption prices are rising to make up for tthat.

 

 

Wed, 08/19/2015 - 09:02 | 6443182 FreeShitter
FreeShitter's picture

Its all bullshit until the moneychangers are dead.

Wed, 08/19/2015 - 09:04 | 6443190 pauhana
pauhana's picture

On what planet has the cost of living gone down?  Certainly not this one!  Beef, chicken, eggs for god's sake, not to mention butter.  I just bought school supplies.  Tuition?  Cell phone bill?  Internet access through cable?  (Cut cord already.  Couldn't afford it.)  Electric bill way up thanks to Obummer's EPA rules!  Taxes?  Everything required for subsistence is up and not just a little.  Our food pantries in this area are empty.  Abuse reports are way up, a sure sign of stressors in the environment.  What recovery?  Not from where I'm standing.   

Wed, 08/19/2015 - 09:06 | 6443200 B2u
B2u's picture

Rents up?  In NYC I can sleep in a cab for $39/night.

Wed, 08/19/2015 - 09:21 | 6443263 Bay Area Guy
Bay Area Guy's picture

Unadjusted food prices up 1.6% over the previous 12 months?  Yeah, right.  What did they substitute for eggs, beef and almost all fruits and vegetables?

Wed, 08/19/2015 - 09:26 | 6443282 madcows
madcows's picture

Based on the Madcows Actual Household Expenditures:

Inflation has been falling.   It's now around 4.7% over last year.  Gas is down 24% YoY.  Food is up 11% YTD.  Household goods is down 24% YoY.  Clothes are up 9% YoY. Telephone/internet is up 11% YoY.  Electric is up 2%.  Heating Oil down 18%.  Cash usage up about 5%.

Of course, inflation is only half the story.  Wages is the other half.  You could have 0 inflation and still be screwed if you took a paycut.  No wage growth for the madcows this year.  So, that 4.7% inflation comes out of savings.  Thank you Dot.Gov.  What would I do w/o you.

Wed, 08/19/2015 - 09:33 | 6443303 Fiscal Reality
Fiscal Reality's picture

Let's dig in to the numbers. Airfare may be down because of the strength of the dollar and lower fuel prices, but I'm not seeing it in ticket prices on Jet Blue or Southwest. Maybe it's international fares that are falling. Gas prices are dropping in August, down to $2.25 for regular, caused by oversupply and stagnant demand. Rent is WAY up in many areas, which will impact big ticket purchases like cars. But food prices continue to dramatically increase. But don't worry, the Fed will have their "pound of flesh" and will keep the 2% annual erosion of your purchasing power moving forward. The CPI is massively manipulated. Visit Shadow Stats for a reality check.

Wed, 08/19/2015 - 10:16 | 6443484 Bay Area Guy
Bay Area Guy's picture

International fares are really falling fast. I travel to Singapore at least once a year. Last November, the fare was a little over $1000 on EVA Airline (Taiwan). This year, same time, the fare was $866 when I booked. Similar percentage reductions on Cathay and Singapore Airlines as well. China Southern can be had for about $650 if you want to fly a China flagged airline and transit in Guangzhou, China, neither of which I would wish upon my worst enemy.

Wed, 08/19/2015 - 10:14 | 6443473 2muchtax
2muchtax's picture

I think I'll substitute food for a plane trip. Eating is going out of style anyway.

Wed, 08/19/2015 - 12:17 | 6443986 Iwanttoknow
Iwanttoknow's picture

airfares plunge? really?

Wed, 08/19/2015 - 12:54 | 6444159 Loucleve
Loucleve's picture

CNBC just assured me that airfares going down is airlines passing along fuel price savings.

strange.  they didnt pass them along 9 months ago.

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