"Stagflation": Core CPI Highest Since Lehman As Rent, Healthcare Costs Soar

Tyler Durden's picture

"This is stagflation: the Fed is increasingly f#*ked," exclaimed one veteran trader as Core CPI - among The Fed's favorite inflation indicators after PCE - surged to +2.3% YoY, the highest since Sept 2008. This is the 10th month in a row above the Fed's mandated 2% 'stable' growth as shelter and healthcare costs continue to surge.

Core CPI growth above Fed mandate for 10th month in a row.


Healthcare and Rent are soaring (bottom right)...

As the cost of living under a roof at night continues to outpace headline inflation...


And Medical Services rose the most since Nov 1982 MoM...


The index for all items less food and energy increased 0.3 percent in August, following a 0.1-percent increase in July.

The shelter index continued to rise, increasing 0.3 percent after a 0.2-percent advance the prior month. The indexes for rent and owners' equivalent rent both rose 0.3 percent in August, as they did in July. The index for lodging away from home turned up in August, increasing 2.0 percent after a 2.4-percent decline the prior month. The medical care index rose sharply in August, increasing 1.0 percent. The hospital services index rose 1.7 percent, and the index for prescription drugs advanced 1.3 percent. The index for motor vehicle insurance continued to rise in August, increasing 0.5 percent. The apparel index increased 0.2 percent, and the index for tobacco rose 0.7 percent after falling in July.


In contrast to these increases, the index for used cars and trucks continued to decline, falling 0.6 percent in August, its sixth consecutive decrease. The indexes for household furnishings and operations, for recreation, and for airline fares all fell slightly in August, each decreasing 0.1 percent. The   indexes for new vehicles and for alcoholic beverages were unchanged in August.

It appears the untenable Keynesian dilemma of 'stagflation' - as profiled in April - is upon us.

Incidentally, we previewed the soaring rent and healthcare inflation back in June of 2015 (and correctly predicted it would take the BLS a year to realize what was painfully obvious to most) when we warned how the Fed would make a major mistake by not hiking when it should have last summer. Now, it's too late.

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achmachat's picture

The best headlines are those that end with "...since Lehman".

VD's picture

the formulas used for CPI calculation smooth everything out -- housing and healthcare in reality are far more inflated than the above suggest....

SomethingSomethingDarkSide's picture

Here is the saddest part: talk to literally anyone on the street or that you meet in life, and ask them how The Fed is doing.  They will say "pretty good".  People are retarded, willfully so considering the limitless information available at their literal fingertips.  Burn them all, I say.

Ghost of PartysOver's picture

limitless information available at their literal fingertips

The Kardashian Arse Dimple rules those devices.  The Digital Decline of an Empire is in full force.

idea_hamster's picture

Bring back Volcker.

He'll give you shock and awe -- rates'll go to 11% in 6 months.

abyssinian's picture

Inflation? what inflation? Everything is cheap!   Yellen needs to move the inflation target to 10% in order to hike rates!

Hal n back's picture

This data isfaulty to the upside. There is no inflation in healthcare as it is an "improvement", remember.

Not to mention that healthcare is 19% of economy and the weighting for cpi is around 6%.

GDP pce is kept low so when taking in real inflation, GDP would be overstated at even 1%.

LawsofPhysics's picture

Better raise those rates Janet!!!!!


I triple dog dare you!

SomethingSomethingDarkSide's picture

Trump Presidency = swinging from a noose.  She is shitting her pants, but will probably take the battle to the streets before raising rates and destroying her own pension.  The sole source of her income and future wealth.

LawsofPhysics's picture

You sir, are an optimist.

But yes, this further confirms that the inflation rate is well above the Fed's mandate.  If the Fed really is "data dependent" and "apolitical" they need to raise another 0.25%.

As far as the "election" goes, politicians like Hillary make "businessmen" like Trump very wealthy.

SheepDog-One's picture

I used to be an optimist, now I'm an optometrist and can see more clearly.

tarsubil's picture

One of the worst things in the world is seeing Janet say, "The two percent target..." When she says that with her retarded drawl, I'm almost overwhelmed with the desire to shatter her face with my fist.

Iconoclast421's picture

I think that is exactly what she is going to do.

RawPawg's picture

can't read this right now

standing in line for that new I-crap item

tarsubil's picture

Did you already get the credit slip for donating your kidney? Man, sorry, but you need that first to get your phone.

Infield_Fly's picture
Infield_Fly (not verified) Sep 16, 2016 8:45 AM

Looks like we are well on the road to recovery - and that's never been said before.




What a fucking mess!!!

LawsofPhysics's picture

Stagflation?  Fail!!!!

This is NOT the 70's, not by a long shot.  Try again asshat!

Seasmoke's picture

I really think it is. I don't know what else you can want to call it. Global Weimar just doesn't cut it for me.

LawsofPhysics's picture

Here's ONE example.  In the 70's we still had a substantial amount of un tapped natural resources and a population under 2 billion...

We could invest one barrel of oil calories and extract 30-40 barrels worth of calories...

that ratio is now less than 3!

Without consumable calories you cannot do shit!

Pushing fucking paper, does not require real work, but then again it does not lead to anything of real value either.

Just because the hundreds of trillions in paper claims that have been created (debt) have not started seeking out real assets yet, does not mean that they won't...


SheepDog-One's picture

'The FED is more fucked over than Lahey, boys!'....lol I love the Sunnyvale style headlines!

overmedicatedundersexed's picture

the fed is not fuckee they are the fucker, happy as clams they be..there is no consequence for them, any more than a wrong weather forecast for your local wealtherperson..get it?

SheepDog-One's picture

Perhaps, but what about the Shit Hawks?

SheepDog-One's picture

Plus the Shitwinds are blowing, bringing in pneumonia.

Nunyadambizness's picture

Let me control a nations money, and I care not who makes the laws.....  Seems I've heard that before somewhere....

gregga777's picture

But, the crucial question for the Goldman Sachs' Feral Reserve System is, "Are the rich getting richer?" The answer is, "Yes!" So, all is well, continue the wealth effect policy.

The Goldman Sachs Feral Reserve doesn't give a s*** about either the bi-coastal peons or Americans in flyover country.

Baby Eating Dingo22's picture

Who cares? Like everything else, Fed already moved the inflation goalposts


And as an independent and unaudited agency, they are free to change their minds again Inside word is plebs will tolerate another 6-7% before pitchforks are borne

MisterMousePotato's picture

"Inside word is plebs will tolerate another 6-7% before pitchforks are borne[.]"

I disagree. The example of Venezuela shows (indisputably) otherwise; viz., proles will tolerate much, much higher inflation, and then do nothing but bang on pans (instead of heads).

This is why the federal government is feverishly importing such people to displace the descendants of Lexington and Concord.

wmbz's picture

This is very good news! Jack will be able to Not raise rates, as expected.

Stawks will just love this, as with all other "news" of any type! Party on!

TheBigN's picture

What's the deal with that "Since Lehman" phrase?

IANAE's picture

Let's see... positive in 2012, negative in 2013-2015, positive in 2016... When are those elections again?

brada1013567's picture

Boy that Obozocare really is working.

Cursive's picture

He IS doing what he was hired for very well.  Oh, and please don't think he was "hired" by the American electorate.

Cursive's picture

It's just rent and healthcare.  Those aren't really important and can be hedonically adjusted in future releases.

jtz5's picture

Same with food & energy...none of that matters.

Seasmoke's picture

Americans were Grubered with Obamacare!!! And they don't look like they are going to do anything about it. So can't say I blame The Tribe for taking candy from a baby.

VarenneRiver's picture

Wake me up when they stop building "luxury" apartments in every metro area and people stop paying 50%+ after taxes to live in them. That's when I'll know...

MrBoompi's picture

The masters of the universe get restless when their wealth rises less than the inflation rate, whatever it is.  It really hasn't been measured accurately for so long nobody knows what it is, but John Wiliams over at Shadowstats is doing his best.  

bada boom's picture

Healthcare, wait a few months, you ain't seen nothing yet...

spanish inquisition's picture

The Fed and the US government have announced a change to all "core" metrics, now to be know as "Common Core" metrics. An anonymous spokesman said, "Its going to give us greater flexability in reporting and will improve narrative control. We have made seasonal adjustments that are easy to see through. With the new structure, it will be almost impossible to see through the bullshit".

Secret Weapon's picture

The Feds are cooking the books harder thant the boys at Enron.  The numbers are much worse.  Just talk to the people on the street, not the turds around D.C.

hotrod's picture

Rents around Atanta are jacked.  No way incomes keeping up just more people trying to crowd in a house.  My 85 year old mother is about to be rent increased out of her place.  My kids are recent UGA graduates and live 3-4 to a home, like their friends in the city, to afford it.

My daughter would like to get a few medical things done but does not want to pay the $5000 deductible.

Iconoclast421's picture

What is up with Atanta? If you search "Atanta GA" in google, and disable all autocorrections, there are actually 4800 results. Is this a real city, or is everyone in Georgia that bad at spelling?

Stevious's picture

And at the same time, I've looked at a dozen tenants that I would not touch.

Alcoholics with recent convictions, people with no income stream, recent drug convictions.

And so my apartment sits--empty.  And Btw, I've reduced my rent $50 from last year... I'd like to see some increased rents in my area (Western, NH)

Very strange world.

Clap4Comments's picture

why is gold going down?

the grateful unemployed's picture

gold is the leading indicator on the markets. follow it

Farmer Joe in Brooklyn's picture

Good news...

Blue Cross Blue Shield of Montana just announced that 2017 premiums would only be going up by 58% (original projections of 63-64%).

Only 2.3% increase in CPI..?!?

Fuck you, you lying cocksuckers.

papaswamp's picture

That price increase wont show up yet. Med care commodities running over 4%.

papaswamp's picture

...and real earnings were for shit. -0.4% with Julys rise reduced from 0.6 to 0.4. This year may see negative earnings.