Core CPI Stays Below Fed Mandate For 6th Straight Month

Tyler Durden's picture

Core CPI has now been below the Fed's 2% mandate for 6 straight months, printing a 1.7% YoY gain in September (weaker than the expected 1.8% rise).

 

Headline CPI bounced back above 2% however, led by a 6.1% surge in Energy costs...

 

The index for all items less food and energy increased 0.1 percent in September following a 0.2-percent rise in August.

The shelter index rose 0.3 percent in September following a 0.5-percent increase in August. The indexes for rent and owners' equivalent rent both rose 0.2 percent, while the index for lodging away from home increased 1.5 percent.

This is the lowest shelter inflation since April 2016...

The motor vehicle insurance index rose 0.5 percent in September; it has declined only once in the last 23 months.

The education index increased 0.3 percent, and the index for recreation rose 0.2 percent.

The indexes for alcoholic beverages, personal care, and tobacco also increased in September.

The index for new vehicles, which was unchanged in August, fell 0.4 percent in September.

The index for household furnishings and operations declined 0.3 percent, and the index for used cars and trucks continued to fall, declining 0.2 percent. The medical care index fell slightly in September, declining 0.1 percent as declines in the indexes for prescription and nonprescription drugs outweighed increases in medical care service indexes. The apparel index declined 0.1 percent in September.

Finally, Dear Janet Yellen - The index for wireless telephone services rose 0.4 percent in September, ending a streak of 14 consecutive declines.

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Stan522's picture

This data has traditionally been the original fake news

Rapunzal's picture

The CPI is a lie. No food costs included, I wish I could eat my TV set.

arkel's picture

Gold jumps to 1300, will drift lower to finish the day unchanged. Stawks finish at all time highs. Rinse and repeat.

Big Creek Rising's picture

Why don't they just change the calculation method, like Clinton did with unemployment in the 1990s? If they do it right they will look like geniuses for managing the economy so well! Simple substitution has long been their favorite method to show low inflation, e.g. use hamburger instead of steak, then ground hoof instead of ground chuck, then chicken instead of beef. Just reverse their previous revisions and BANG! ZOOM! REAL INFLATION! 

YUNOSELL's picture

Maybe they should revert back to how they calculated inflation from the early 1980s and before for seventy years, and I'm certain they will find the inflation they so desire

Stan522's picture

They adjust the way they calculate CPI until they get their desired results....

Kidbuck's picture

Don't forget no health care costs included at par,
no house prices at par,
no education expenses at par,
no new car prices at par.

I want to shove a telephone pole up Yellen's ass sideways and tell her to hedonisticly call it a tickle.

CRM114's picture

Don't forget to leave the terminals and the live wires on the pole.

Dr. Engali's picture

Only one thing to do here. Print bitchez!

wonger's picture

Jim Rickards thinks their not raising in December and right now i can take 27-1 odds on a raise with a betting exchange, im long euro for no raise

buzzsaw99's picture

the fed funds rate has zero effect on any of this but they pretend it does. 

 

they raise rates it just crushes the spread, net effect on real economy, nilch.

they raise rates, the s&p goes up. they lower rates the s&p goes up...

 

 

surf@jm's picture

JAZCFS.........

Just Another Zero Cola For Seniors.........

Just Take It All's picture

There is no "2% mandate".  2% is merely the Fed's current (unintentionally ironic) interpretation of what constitutes price stability.  The Fed can just as easily decide to target 0% (Lol) or 4% (Berspankme).

Kidbuck's picture

"Penetration, however slight, is still rape." - Uniform Code of Military Justice

These fuck heads announce they intend to steal 2% of my purchasing power every year and I should feel grateful? How should I feel that they have been taking at least 10%?

The death penalty is too good for them.

wonger's picture

Usa attack North Korea, snp go down biggly, much more biggly than the upply lol  

brushhog's picture

The big error in all of central banking ( and all central planning in general ) is their attachment to these measures...CPI, GDP, etc. They think if these numbers are going up it means the economy is going up. However, once you isolate a measure and try to control it, it no longer is a reflection of something real, it becomes a reflection of soemthing artificial. Its sort of like saying, well if a person has a pulse of 72 BPM then that person has a healthy heart. OK so now we hook the person up to a machine or feed them a drug to force the heart to beat 72 BPM. Then we conclude this person has a healthy heart. In reality, a heart beat that is too fast or too slow is only an indication that something may be wrong with the heart. Changing the indicators doesnt make the heart healthier.

In trying to manipulate inflation data they are approaching the economy all wrong. The underlying problems of debt, too high asset prices, stagnant wages, etc are not really being addressed. They are mistaking the map for the road.

Just Take It All's picture

Agreed, and also the bond "markets" of the world have become a giant hall-of-mirrors, with the central banks looking at the market and tinkering in the market, and also the market looking at the central banks and front-running the tinkering.  What a clusterfuck.

brushhog's picture

It no longer resembles anything like a functioning market. They think if they manipulate the indicators to resemble a healthy economy that they will create a healthy economy. Cant work that way, IMO.

khakuda's picture

Yes.  To some degree, even in their academic orthodoxy, I think they realize (because even a monkey can now recognize)  if they keep the fireplug of free money wide open, asset prices will just keep going up every day.  And unless you were asleep over the past 15 years and missed 2 major asset bubbles/collapses, we all know how that ends.  That is why they keep talking about modest increases, lest the markets run to the moon.

Your point is exactly right.  The Fed decided in 2008 that they couldn't fix anything, so they were going to break the glass and move the speedometer needle to show what they wanted to see.  They wanted higher asset prices as an indication of their success, so they pushed rates below inflation and printed like crazy.  So, you got higher asset prices.  It did nothing for the underlying issues you point out, but that didn't stop them from patting themselves on the back.  The also very sneakily changed their inflation measure from CPI to PCE a few years back because it is biased to show lower inflation and they self-imposed a 2% mandate so they could justify too easy money.  Now, Bernanke is proposing that the mandate requires if they undershoot their idiotic inflation target, they must overshoot to make up for it.  He even cites Krugman, further proving his insanity.  Never mind that inflation doesn't craete value.  It robs those who don't own bubbling assets and whose wages don't keep up.  It is a wealth transfer scheme to increase wealth inequality and it is working like a charm.  They should hang.

I'm also old enough to remember that the inflation calculations were all manipulated to understate inflation back in the 70s and 80s when inflation ran near 20%, so the numbers all understate the true cost of living increases.

HominyTwin's picture

An economist from an earlier time said something to the effect, that 'once you rely on a statistic for control purposes, it ceases to have any meaning'.

adr's picture

Hasbro has raised the prices of their mainline toys 20% each year for the past five years.

I just found out from someone that certain retailers like Dick's Sporting Goods are trying to figure out which products they can raise prices $5 without people caring. Most moving things from $30 to $35, $50 to $55. All to try and increase their own margin.

I noticed a popular pack of beef jerky went from 2.5oz to 2oz, price stayed the same.

Ever since Oblammy took over inflation has been 20-30% a year, up to 200% in some areas. The Tribe is trying to see how far they can push inflation before everything finally breaks. So far people have absorbed 20% a year without cutting their heads off, so they are being careful to keep most of the increase in that range.

Hasbro figured out that they pushed a little too hard this past year and people wouldn't pay double what they used to. A $20 MSRP for what used to be a $10 item was met with absolute failure. People accepted the increase to $15, but not $20. It is amazing how the apologists just accepted Hasbro's explanation of increased costs. They cut the parts count, massively cheapened the product, and moved production from Chin to Vietnam and had the gall to claim they were facing higher costs.

Sadly I had to tell my son that I wouldn't be buying the toys he liked anymore if the price kept going up. Since I produce products for a living, I won't support gouging.