by Mish Shedlock, The Maven:
Once again the BLS tells us inflation is under control. Once again, close inspection suggests something else.
Let’s investigate, starting with the BLS Consumer Price Index Report for December 2019.
CPI Month-Over-Month and Year-Over-Year
Hooray! Inflation Tame
Hooray, inflation as measured by the BLS is only up 2.3% from a year ago.
The Bloomberg consensus estimate was 0.3% month-over-month so 0.2% looks tame. The core inflation measure (CPI excluding food and energy) rose only 0.1% vs the expected 0.2%.
But does your basket match this?
CPI Percentage Weights
It’s when you dig into details you find disturbing trends, like the lead chart and this.
Medical Care Costs Month-Over-Month
Medical Care Cost Detail
On the rare occasions the month-over-month price drops, costs the following month tend to jump 0.6% to 0.8% or higher.
Medical Insurance Quotes
I posted these quotes last month, but it’s worth another look after this gloomy report.
I went to NerdWallet for some quotes. My base case was a husband and wife making a combined $100,000, both aged 60, non-smokers, with no dependents.
Same Couple Making $60,000
Synopsis
The BLS tells us, medical care is only 6.654% of the “average” household expense.
Average includes all those on medicaid and medicare. It also includes those on company plans.
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