No Inflation In December BLS Says

The December CPI is out, and according to the BLS, or more specifically, it's X-12 Arima reality processors, there was no inflation in the past month, with headline CPI printing at 0.0%, as expected, and up from a 0.3% deflation in November. Excluding food and gas, CPI rose 0.1%, less than the expected 0.2%. Compared to a year ago, inflation was a tame 1.7%, the BLS would like you to believe, and 1.9% ex food and energy. Luckily these numbers exclude such soaring in price items as education, and it certainly excludes a proxy for reserve inflation such as the stock market, which while certainly not a part of staple purchased goods, shows just where the free Fed money is going. As such, the S&P is as good a proxy of real, free money generated "inflation", as anything else. Naturally, once the stock market bubble pops, things will change, but for now why buy food when one can buy FUD and pray there is a greater fool to sell it to in a day or to. The biggest reported change in inflation Y/Y is in the price of medical care services which increased 3.7% compared to December 2011, and Utility gas service, which in turn declined by -2.9% from a year earlier. Finally, for those confused why producers see the need to dilute coffee and bear, and add just a little more than the RDS of horse meat to burgers, the reason is that food at home prices increased by 1.3% in 2012, while dining out has gotten a whopping 1.8% more expensive. That's right: the price of the food you eat at home has increased by 1.3% in the past year - so says the BLS which apparently like the Fed, only eats hedonically adjusted iPads.

Some charts:

And from the report:

Year in Review:

The CPI rose 1.7 percent in 2012 after a 3.0 percent increase in 2011. This was the third smallest December-December increase of the past ten years and compares to a 2.4 percent average annual increase over the span.

The energy index increased 0.5 percent in 2012, a sharp deceleration from its 6.6 percent increase in 2011. The gasoline index rose 1.7 percent in 2012 after increasing 13.8 percent in 2010 and 9.9 percent in 2011. The household energy index declined in 2012, falling 1.1 percent after increasing 1.8  percent in 2011. The fuel oil index rose 3.6 percent in 2012, but the electricity index decreased 0.5 percent and the index for natural gas fell 2.9 percent, the fourth straight year it has declined.

The index for food rose 1.8 percent in 2012, a deceleration from its 4.7 percent increase in 2011. The index for food at home rose 1.3 percent in 2012 compared to 6.0 percent in 2011. Five of the six major grocery store food group indexes rose in 2012, with increases ranging from 0.5 percent (dairy  and related products) to 2.0 percent (other food at home). The nonalcoholic beverages group was the only index to decline, falling 0.2 percent. The index for food away from home rose 2.5 percent in 2012 after increasing 2.9 percent in 2011.

The index for all items less food and energy decelerated slightly in 2012, rising 1.9 percent after a 2.2 percent increase in 2011. This matches the average annual increase of 1.9 percent over the past ten years. Several indexes decelerated in 2012. The apparel index, which rose 4.6 percent in 2011,  increased 1.8 percent in 2012. The index for new vehicles increased 1.6 percent in 2012 after rising 3.2 percent in 2011, and the medical care index rose 3.2 percent in 2012 after a 3.5 percent increase the prior year. The index for airline fares rose 2.1 percent, the tobacco index increased 1.9 percent, and the recreation index rose 0.8 percent; all of these increases were smaller than in 2011. The index for household furnishings and operations was unchanged in 2012 after rising in 2011, and the index for used cars and trucks turned down in 2012, falling 2.0 percent after increasing 4.0 percent in 2011. In contrast, the shelter index accelerated in 2012, rising 2.2 percent after a 1.9 percent increase in 2011. The index for rent rose 2.7 percent and the index for owners’ equivalent rent increased 2.1 percent.