CPI data/Claims

The July CPI rose .2% m/o/m both headline and core exactly as expected. Due to rounding, the y/o/y rise of 3.2% was one tenth below the forecast but the core rate at 4.7% was as anticipated. These compare with 3% and 4.8% respectively in June. Energy prices rose .1% m/o/m after a .6% rise in June even though gasoline prices itself was up about 7% in July. Energy prices within this data was down 12.5% y/o/y. Food prices were up .2% m/o/m and 4.9% y/o/y. Prices ex food/energy/shelter fell .1% m/o/m and up 2.5% y/o/y. So if you don’t eat, travel and happen to live in a tent, prices are close to the Fed’s 2% target.

Services inflation ex energy prices were up .4% m/o/m and by 6.1% y/o/y as rental gains continue to drive the rise as OER was up by .5% m/o/m and 7.7% y/o/y and Rent of Primary Residence was higher by .4% m/o/m and 8% y/o/y. We know though this crucial and large component hasn’t yet caught up to the blended rental rise being currently seen broadly speaking of about 3-4%. There continues to be huge inflation with regards to auto insurance and auto maintenance with the former seeing prices up by 2% m/o/m and 18% y/o/y and the latter having prices up 1% m/o/m and 12.7% y/o/y. Airfares, mostly led by domestic as heard from many airlines, fell 8.1% m/o/m for a 2^nd month, and are lower by almost 19% y/o/y. Eating out though is expensive with prices up .2% m/o/m and 5.8% y/o/y for full service restaurants and .2% m/o/m and 7.1% for limited service meals. Hotel prices fell .5% m/o/m but still up 6.6% y/o/y.