CPI rundown, am I going to start hearing inflation ex food, energy, housing and insurance?

March CPI rose .4% m/o/m both headline and core and that was one tenth above expectations for both. The y/o/y gains of 3.5% and 3.8% for each compare with 3.2% and 3.8% in February. Energy prices continued to rebound for a 2^nd month, up by 1.1% in March and higher by 2.1% y/o/y as gasoline prices jumped by 1.6% in the month. Food prices were up by .1% m/o/m and 2.2% y/o/y. Digging deeper with food, eating out of home saw prices rise .3% m/o/m and 4.2% y/o/y which compares to eating at home which saw flat m/o/m change and a gain of 1.2% y/o/y. This differential helps to explain the softening we’re hearing about with respect to traffic at restaurants. Taking out food, energy and shelter saw prices higher by .3% m/o/m and 2.4% y/o/y.

Services inflation ex energy rose .5% m/o/m and remaining persistent with a 5.4% y/o/y gain. Yes, still elevated by rents which I mentioned this morning will still take time to adjust to on the ground rental gains. Owners Equivalent Rent was up by .4% m/o/m and 5.9% y/o/y. Rent of Primary Residence was higher by .4% m/o/m too and 5.7% y/o/y. As for insuring a home, whether you own or rent, ‘Tenants and Household Insurance’ prices rose .5% m/o/m and by 4.6% y/o/y. Also boosting service inflation was a .5% m/o/m jump in medical care costs and up 2.2% y/o/y. We are finally getting reality again when it comes to health insurance costs which rose 1.2% m/o/m and the 3 month annualized rate is up 12%. As for vehicle insurance, I recommend not driving if you can as prices spiked by 2.6% in the month and higher by a whopping 22.2% y/o/y. Fixing a car is barely cheaper with prices rising by 1.7% in March and by 8.2% y/o/y. On the travel side, airfares dipped by .4% m/o/m but after jumping by 3.6% in February. Hotel prices were unchanged m/o/m but down 2.4% y/o/y. There is a clear differentiation between high end hotel prices and lower end which reflects the bifurcation among its customers.

On the core goods side, that is where prices remain calm as they fell .2% m/o/m and lower by .7% y/o/y which I believe is bottoming out. Lower new and used car prices were the main reason. Also, prices related to home furnishings and other things helped as they fell one tenth m/o/m and 2.7% y/o/y. Apparel prices were up by .7% m/o/m, though little changed y/o/y.