CPI: Look Behind The Headline

CPI: Look Behind The Headline

Posted by Karl Denninger

I’m not particularly happy about this report, although the “street reaction” was that it was “pretty much as expected.”

I note with some curiosity that the apparent math error from last month has not been revised out – it’s still there (housing.)  This month’s computation, at first blush, looks ok.

The nastiness inside the report comes from the fact that medical care inflation is alive and well, running 1/2% month-on-month.  This is the second month straight of that, which is well beyond the annualized 3.6% being claimed.  If it continues, things get very interesting, especially given Obama’s Health Care “reform” push.

Offsetting this is a material drop in rent, which is definitely not a bad thing from the consumer’s perspective.  Of course government-provided “gotta buy ’em” services (water and sewer) are up materially.  Fortunately they’re not a huge part of the equation.

All-in-all the report is pretty benign, but one has to wonder on the health care issues – is that people jacking prices ahead of Obama’s “proposals”?  Naw, nobody would ever do something like that…. would they?