The CPI rose 0.1% in July vs an Econoday consensus estimate of 0.2%. The Econoday Keynesian parrot does not like falling auto prices but is happy about rising medical prices.
Consumer prices remain very soft, failing to match what were modest Econoday expectations for July. Total prices edged 1 tenth higher in July as did the core (less food & energy) which are both no better than the low estimates. Year-on-year rates are also at the low estimates, at 1.7 percent each. Moderation in housing costs remains a major disinflationary force, inching only 0.1 percent higher for a yearly 2.8 percent which is down 2 tenths from June. And wireless services, in keeping with the telecom revolution, continue to move lower, falling 0.3 percent on the month for a yearly decline of 13.3 percent.
Vehicle sales have been weak this year and it’s being reflected in prices which fell 0.5 percent in the month. Lodging away from home is another major negative in the July report, falling a record 4.2 percent as motels and hotels cut prices. On the plus side, apparel prices, which had been on a long negative streak, rose 0.3 percent though the year-on-year rate remains in the negative camp at minus 0.4 percent. Medical care is a plus in the report, rising 0.4 percent for the second straight month with the year-on-year rate, however, edging lower to 2.6 percent. Energy prices are a negative in the report, at minus 0.1 percent, offset by a 0.2 percent rise for food.
Is the dip in inflation the result of one-time effects that will soon pass? Or is it the result of weak wages and general global disinflation? Lack of inflation remains the central trouble in the Federal Reserve’s policy efforts. Today’s results will not be improving expectations for the beginning of balance-sheet unwinding at the September FOMC.
CPI-U Urban Consumers
CPI Details
- Since March, the CPI is slightly negative
- Since March, the CPI excluding food and energy is growing about 1% annualized
- New vehicle prices are down for the 5th month
- Used vehicle prices are down for the 6th month, falling every month this year
- Medical care commodities are up for the 3rd month
- Medical care services are up for the second month
The Econoday parrot is the only one I am aware of cheering rising medical prices.
The parrot is always happy when consumers get less for their money, no matter what the category.
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New York Fed President William Dudley says inflation is “elusive”. For discussion, please see link number 2 above.
Mike “Mish” Shedlock
“Used vehicle prices are down for the 6th month, falling every month this year”
…
Beach goers have picked up flapping fish on the beach … and gazed toward the horizon … something not looking right …
…Or it’s all those Uber drivers who took advantage of Uber’s car purchase program and are now turning cars in because they can’t afford the terms on the subprime loans. Ooops!
Econoday “happy about rising medical prices.” What planet do these people live on?
Someone needs to shove that Econoday Parrot into the Coal Mine to replace the Canary.
Econoday just a bunch of axholes. Safe to ignore them.
The same planet as all those similarly indoctrinated to be happy about rising other prices. It’s not like there’s anything special, unique nor magical about exactly those prices that happen to be counted as part of “medical care.”
It is my feeling that by October we will be in a serious recession.I’ll be happy to be proven wrong. The world economy has nowhere to go,it is the end of Capitalism the way we know it.what will replace it nobody knows. World war 2 gave it a few more years but that’s it. World war 3 will not help it would be back to the Stone Age.
Apparently the Federal Reserve is also happy when consumers get less for their money…The Dollar is down another .5 percent today…
Top selling car is Subaru ,but discounts of 10 + to 15+ off sticker can be had …you might have to walk out of the showroom ..but the’ll call back
Reblogged this on World4Justice : NOW! Lobby Forum..
Any slip in technology prices / services is to be expected since technology is a structural deflationary force. How many people could afford a mainframe in the 1970’s? It is certainly a lot more than the number of people today who do not have a device with a microprocessor.
I’ve been doing some traveling this summer. I’d like to know where the cheap hotels are. Certainly weren’t were I was going.
Damn autocorrect!
were=WHERE
Looking forward to “are” self-driving cars LOL.
CPI isn’t “weak”
It is irrelevant.
It has no correlation with real life costs. The smart money stopped paying attention to CPI long ago