August Consumer Prices Surge As Shelter Costs Spike Most Since 2005

Tyler Durden's picture

After disappointing (for The Fed's inflationistas) producer prices growth yesterday, consumer prices jumped 0.4% MoM in August - the biggest spike since January. Gains were driven by soaring energy costs (offset by a big decline in vehicle prices).

 

Year over Year, CPI remains below The Fed's mandat at +1.9% but that is hotter than expected and the highest since April..

 

As the breakdown shows, the gains were largely driven by rising energy and shelter costs (and note that vehicle prices are tumbling)

The motor vehicle insurance index continued to rise, increasing 1.0 percent in August. The recreation index also increased in August, rising 0.2 percent. The medical care index rose 0.1 percent in August. The index for physicians' services advanced 0.4 percent, and the hospital services index increased 0.2 percent. The apparel index rose 0.1 percent in August, as did the indexes for alcoholic beverages and for household furnishings and operations. The index for new vehicles was unchanged in August after declining in July.

The index for airline fares, which rose 0.7 percent in July, fell 1.0 percent in August. The index for used cars and trucks continued to decline, falling 0.2 percent. The indexes for tobacco, for education, for wireless telephone services, and for personal care all declined 0.1 percent over the month

And in core inflation, the shelter index was the main contributor to the rise, increasing 0.5 percent, its largest increase since October 2005.

The rent index increased 0.4 percent, and the index for owners' equivalent rent rose 0.3 percent. The index for lodging away from home rose sharply, increasing 4.4 percent after decreasing 4.2 percent in July.

  • Rent Inflation+3.9% YoY
  • Shelter inflation +3.3% YoY

So great news - the cost to drive and to have a roof over your head just surged!

Still absent Food, Energy, and Shelter, consumer prices in America are rising at almost the slowest rate on record...

 

The market is confused...

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thevekja's picture

"Inflation is running around 2%"... lol

Lostinfortwalton's picture

Don't worry when you retire your SS wil be indexed for inflation. Sorta. Maybe. Sometimes a little. OK, not really.

Bay of Pigs's picture

Pitz tried to claim that Canada's shelter cost was 1% higher this past year. He is an inflation denier, lol.

Fidel Sarcastro's picture

I prefer deflation to inflation. Screw the banker's idea that higher prices & LESS purchasing power is good.

ejmoosa's picture

I prefer a number that accurately reflects the supply and demand for money reflected by real interest rates.  Inflation should be 0, as in a very stable money supply.  Anything else just gets buried into the interest rate anyway.

gatorengineer's picture

Im experiencing tremendous wage deflation.  Deflation anywhere else not so much.

Golden Breakout's picture

Gold up on the news. Back to its traditional role as an inflation hedge?

shizzledizzle's picture

Gold is all over the fuckin place. $7 swings back and fourth in 5 minutes. 

Bay of Pigs's picture

Those are algo's, not people.

ejmoosa's picture

And home sales here in North Atlanta have come to a grinding halt.  How's the Fed gonna stimulate housing sales this time with already low rates?  Cut the standards for making the loans is really all they have left.

gatorengineer's picture

Expand no doc liar loans programs, is about all they have left.  Mortgages still can drop half a percent.

serotonindumptruck's picture

Otherwise known as "fog the mirror" loans.

wisehiney's picture

Come on you fuckers.

Sell those treasuries.

I am down here waiting for you.

silverer's picture

The goal in the US is for the bought and corrupt government to stand to the side while the central banks and FED make the top 1/2% rich while strip mining what's left of the middle class. They totally love the idea of being able to create money for free, and exchange that money for real, tangible goods. "Here, Mr. Home or Car purchaser. Here's the money we created out of thin air that you can go and exchange for goods. You provide the work and labor, we provide worthless money to lend you that we never worked for. We actually have ownership of whatever you bought with that borrowed money, and we sure thank you for using our services (sucker)."

J J Pettigrew's picture

CPI YoY Chart is misleading.....

The inflation is CUMMULATIVE and COMPOUNDED...a chart with those effects would show a solid UP chart

in the era of "not enough inflation" per Yellen's comments, prices from 2009 are up 15%!

At Yellen's "disappointing" 1.7%, prices will be up 20% in ten years....(the Fed has no right or authority to promote anything other than STABLE PRICES)

The CPI is a TERRIBLE metric, health insurance is weighted the same as magazines and firewood.  I must buy expensive health insurance EACH MONTH and cant remember when I bought either a magazine or firewood.

Scrap the CPI

Swamidon's picture

I built a house 5 years ago.  Walking through Home Depot these days looking at the way prices have gone up and the quality has gone down along with service, I'm glad I don't have to shop there any longer.  Apparently they stay in business now by selling inferior materials packaged by the screw.