CPI rundown

Headline and core CPI in July each rose by .2% m/o/m as expected. The y/o/y gains were 2.9% and 3.2% respectively vs 3% and 3.3% in the month before. Energy prices were flat m/o/m after 2% declines in the two prior months and up by 1.1% y/o/y. Food prices grew by .2% m/o/m and 2.2% y/o/y. Differentiating between eating at home vs eating out, the former saw prices up .1% m/o/m and 1.1% y/o/y while the latter saw prices up .2% m/o/m and 4.1% y/o/y and why restaurant traffic is slipping.

On the service side ex energy, prices rose .3% m/o/m and 4.9% and single handedly still holding up overall inflation. Rents continue to be a key factor. OER was up .4% m/o/m and 5.3% y/o/y and Rent of Primary Residence prices were higher by .5% m/o/m and 5.1% y/o/y. As seen with many of the publicly traded multi family REITS, blended rents are rising more like 2-3%. Either way, while the BLS calculation is still lagging reality, it NEVER fully reflected the rental price spikes either. Medical care prices, another big component of CPI, fell .2% m/o/m, though still up 3.2% y/o/y. That is thanks to a 1% price drop in ‘hospital services’, though they are up 6.1% y/o/y. Health insurance costs fell .4% m/o/m but quirks are still flowing thru this data as prices are stated down .6% y/o/y but we know that is not anywhere close to reality.