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The Core CPI Declines 3 Months for the First Time Ever
by Mish Shedlock, The Street:
Month-Over-Month Key Points
- The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in May on a seasonally adjusted basis after falling 0.8 percent in April.
- Declines in the indexes for motor vehicle insurance, energy, and apparel more than offset increases in food and shelter indexes to result in the monthly decrease in the seasonally adjusted all items index.
- The gasoline index declined 3.5 percent in May, leading to a 1.8-percent decline in the energy index.
- The food index increased 0.7 percent in May as the index for food at home rose 1.0 percent.
- The index for all items less food and energy fell 0.1 percent in May, its third consecutive monthly decline. This is the first time this index has ever declined in three consecutive months.
- Along with motor vehicle insurance and apparel, the indexes for airline fares and used cars and trucks declined in May.
- The indexes for shelter, recreation, medical care, household furnishings and operations, and new vehicles all increased.
Year-Over-Year Key Points
- Over the last 12 months, the all items index increased 0.1 percent before seasonal adjustment.
- The index for all items less food and energy increased 1.2 percent over the last 12 months; this compares to a 2.4-percent increase a few months ago (the period ending February).
- The energy index fell 18.9 percent over the last year.
- The food index increased 4.0 percent over the last 12 months, with the index for food at home rising 4.8 percent.
CPI and CPI-U Year-Over-Year
Poor Measure of Inflation
These indexes are purported to measure inflation.
They do nothing of the kind. The indexes do not include home prices, only rent.
The purported medical inflation is a joke. Anyone who buys their own medical insurance will tell you their costs are up more than the reported 5.9%.
Anyone in college has not been pleased with the rising cost of tuition and rent in college towns.
And anyone with an ounce of common sense knows the current stock market bubble is a measure of inflation.
Lie of the Day, Month, and Year
The Fed and economists pretend that “inflation” is only up 0.1% year-over-year.
The Fed and economists in general do not know how to measure “inflation”.
And the Fed’s efforts to produce it has created destructive bubbles sure to pop causing the deflation they hope to prevent.
