Yesterday, we had a look at production cost inflation (through the PPI). Today, it's time to consult the CPI-U and see what, if anything, has passed on to consumers.
Last month, April's CPI-U was a mixed bag of results. It increased 0.4%, which was right in line with expectations, while core CPI-U increased 0.2% (missing expectations). We also saw the energy index rise 2.2% and the food index rise 0.4%. Finally, for the rolling year, CPI-U had increased 3.2%.
This month, the Econoday-surveyed analysts are suffering from a bout of rampant optimism. They're calling for a flat 0.0% change in CPI-U, and a 0.2% increase in CPI-U. Are they right?
The short answer: no.
The long answer comes from the Bureau of Labor Statistics' Consumer Price Index Summary, which shows a 0.2% increase in CPI-U for the month of May[1], and a 0.3% increase in core CPI-U. Much of the increase is attributed to increased costs for clothing, shelter, new vehicles and recreation, which offset declines in costs for airline fare, tobacco, and personal care. The food index increased 0.4%, but the energy index decreased 1.0%(!).
All of this puts CPI-U up 3.6% for the rolling year, core CPI-U up 1.5% for the rolling year, food CPI up 3.5%, and energy CPI up 21.5%.
[1] Not too bad, really. Although, technically, this means that we missed expectations by (infinity - 1)%. Feel free to ask, if you really want to see the math. But that's an amusing technicality in any event, because we really only missed expectations by 20 basis points..
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