Transitory? US Core Consumer Prices Are Rising At Fastest Pace In 30 Years

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by Tyler Durden
Tuesday, Jul 13, 2021 - 08:40 AM

"Transitory" or not? That's the question today as all eyes dives into the details behind the surge in Consumer Prices for signs that Powell's plan is failing. BofA forecast headline and core CPI prints to come in hotter than expected (and they've nailed every print this year) and they were right again with a massive beat - Headline CPI rose 0.9% MoM (against expectations of +0.5%), the biggest MoM jump since June 2008. This sent YoY headline CPI soaring to +5.4%,

Source: Bloomberg

The index for used cars and trucks rose sharply for the third consecutive month, increasing 10.5 percent in June. This was the largest monthly increase ever reported for the used cars and trucks index, which was first published in January 1953 

Which is odd since the Manheim index is already declining (transitory)

Used vehicles accounted for one third of the gain in the CPI last month...

Some line items saw price declines:

  • The index for household furnishing and operations fell 0.1 percent in June after rising 1.3 percent in May. The index for communication was unchanged for the month.

  • The medical care index declined 0.1 percent in June, as it did in May. Medical care component indexes were mixed.

  • The index for prescription drugs declined 0.2 percent in June after falling 0.3 percent in May.

Core CPI soared 0.9% Mom (against exp of +0.4%), exploding at 4.5% YoY - its highest since Sept 1991

Source: Bloomberg

Goods prices are rising dramatically faster than Services. Goods are up 8.7% YoY, the fastest annual surge since Jan 1981

Source: Bloomberg

Shelter inflation is now surging, up 2.58% YoY in June from 2.21% in May, and the highest since last April...

Get back to work Mr.Powell!!!