BLS Reports Net Negative Inflation for 5 Months: Anyone Believe That?

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Published : July 14th, 2017
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Category : Opinions and Analysis

Today the BLS reported the CPI was flat. The Econoday consensus was for a 0.1% rise.

Over the last five months, the CPI is -0.1%. Over the last four months, the CPI is -0.2%.

In what is one of the very weakest 4-month stretch in 60 years of records, core consumer prices could manage only a 0.1 percent increase in June. This is the third straight 0.1 percent showing for the core (ex food & energy) that was preceded by the very rare 0.1 percent decline in March. Total prices were unchanged in the month with food neutral and energy down 1.6 percent.

Housing, which is a central category, continues to moderate, also coming in at 0.1 percent following a 0.2 percent gain in May. Apparel is down for a fourth month in a row with transportation, reflecting falling vehicle prices, down for a second month. Medical care, which had been moderating, picked up with a 0.4 percent gain while prescription drugs which Janet Yellen has been citing for special weakness, bounced back with a 1.0 percent gain. However wireless telephone services, another area cited by Yellen for weakness, posted another sizable decline, down 0.8 percent in June.

Year-on-year, the core is steady at 1.7 percent with total prices, which fluctuate much more than the core, down 3 tenths to 1.6 percent. The Fed may be blaming this stretch of weakness on special factors, but that argument is losing force.

CPI June 2016 – June 2017

Percent Changes by Category

BLS Figures

  • All Items: Down -0.1% Net for last 5 months
  • Core CPI: Up net 0.2% over last 4 months
  • Fuel Oil: Down 5 consecutive months
  • Commodities excluding food and energy: Down 4 consecutive months
  • New Vehicles: Down 5 consecutive months
  • Used Vehicles: Down 6 consecutive months
  • Apparel: Down 4 consecutive months

Supposedly medical care services are up only 0.3% over the last four months. Medical care commodities are up a net 0.3% over the last five months.

Your results may vary.

Mike “Mish” Shedlock

Source : mishtalk.com
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Mish 13 abonnés
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
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