Core Consumer Prices Surge At Fastest Rate Since 1992

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by Tyler Durden
Thursday, Jun 10, 2021 - 08:40 AM

With the world's eyes having moved on from China's rip-roaring PPI (and post-data decision to unleash price controls), this morning's CPI print has been heralded as the arbiter of "is it transitory or not" with some (BofA) even suggesting we are nearing a period of "transitory hyperinflation." The answer for now is - inflation's still accelerating as headline CPI soared 5.0% YoY (hotter than the +4.7% expected). That is the highest level of inflatuion since Aug 2008.

Source: Bloomberg

But it is core CPI that is the huge outlier, soaring 3.8% YoY - the hottest level of inflation since 1992...

Source: Bloomberg

Goods prices are up 6.5% YoY - the highest since 1982 - and services prices are also accelerating significantly.

Source: Bloomberg

Under the hood, many of the same indexes continued to increase,  including used cars and trucks, household furnishings and operations, new vehicles, airline fares, and apparel. The index for medical care fell slightly, one of the few major component indexes to decline in May

The household furnishings and operations index increased 1.3 percent in May, its largest monthly increase since January 1976.

The index for used cars and trucks continued to rise sharply, increasing 7.3 percent in May. This increase accounted for about one-third of the seasonally adjusted all items increase.

Source: Bloomberg

The index for new vehicles rose 1.6 percent in May, its largest 1-month increase since October 2009. The index for airline fares continued to increase, rising 7.0 percent in May after increasing 10.2 percent the prior month. The apparel index also rose in May, increasing 1.2 percent.

The index for car and truck rentals continued to rise, increasing 12.1 percent after rising 16.2 percent the prior month (and more than doubled over the past 12 months, rising 109.8 percent).

Notably - amid all the headlines of soaring food prices and supply chains - the BLS believes food price inflation is slowing...

Source: Bloomberg

Finally, rent/shelter inflation remains subdued

  • MoM: The shelter index rose 0.3 percent in May. The index for rent rose 0.2 percent and the index for owners’ equivalent rent increased 0.3 percent   

  • YoY:  The shelter index increased 2.2 percent over the last 12 months.

So, Transitory or not?