CPI rundown

The October CPI data was exactly in line with expectations with .2% headline and .3% core gains m/o/m and 2.6% and 3.3% y/o/y increases. That compares with 2.4% and 3.3% in the month before. Energy prices were flat m/o/m but down 4.9% y/o/y. Food prices grew by another .2% m/o/m and up by 2.1% y/o/y. Food at home continues to be cheaper than eating out. Prices here rose .1% m/o/m and 1.1% y/o/y. Eating out saw prices up by .2% m/o/m and 3.8% y/o/y.

Services inflation ex energy continues to lead the inflation higher as it always does. Prices rose .3% m/o/m and 4.8% y/o/y. Rents are certainly still a factor with OER up by .4% m/o/m and 5.2% y/o/y. Rent of Primary Residence was up .3% m/o/m and is reflecting the deceleration and up by 4.6% y/o/y. Yes, in reality blended rents are running up about 2-3% but CPI never captured the spikes seen a few years ago. Medical care prices rose .3% m/o/m and up by 3.3% y/o/y and is a factor too in the persistency of services inflation. Health care insurance prices rose .5% m/o/m and by 6.8% y/o/y in particular. After skyrocketing vehicle insurance price increases, they fell .1% m/o/m, though still up 14% y/o/y. The cost of fixing one’s car saw a 1.1% m/o/m jump and higher by almost 6% y/o/y. Likely due to the cuts in airline capacity, airline fares jumped by another 3.2% m/o/m, the same pace in September and after spiking by 3.9% in August. They are now higher by 4.1% y/o/y. Hotel prices rose .5% m/o/m but down by .6% y/o/y.