CPI: Nobody Buys Food Or Energy

Inflation 1

There’s no problem with food and energy prices going up…. right?

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.

For the second month in a row, the substantial increase in the all items index was mostly the result of an increase in the gasoline index, which rose 7.0 percent in September after increasing 9.0 percent in August. The other major energy indexes increased in September as well.

That’ll leave a mark.

Let’s have a look inside at the unadjusted figures.

Notables are Dairy, fruits and vegetables, up 0.5% and 0.4% respectively, while meats and cereals were each down a similar amount.  Non-alcoholic beverages were up 0.7% on the month, which is a curious change.

Energy commodities were up in a seirous way, other than piped gas and electricity; all sorts of fuels were up 4.1% (again, unadjusted.)  And all items less food and energy, unadjusted, was up 0.3%, not 0.1%, which is a 3.7% annualized rate of increase in core.

Apparel was up 4.1% while used vehicles were down 2.1%.  Demand problem?  Hmmm….

Finally, physicians and hospitals were up 0.4 and 0.5%, respectively, on the month.

If you want to see real stunners, look in the detail tables.  Women’s clothing was up a shocking 24.2% on the month for outerwear and 13.4% for dresses (!)  Girls wasn’t much better, up 10.1%.  It appears that whatever the “new fashion” game may be for this fall the clothing designers are screwing women in a big way; my recommendation would be to not bite on that bait.

Another interesting internal indication in the data is that car and truck rental prices were down over 7% on the month; this maybe an indication of travel softness.  These figures have been weak for the last year, and this is a rather notable secondary indication on business travel in particular.

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