Wednesday, June 10, 2020

BREAKING: Consumer Price Index Falls

The Consumer Price Index declined 0.1 percent in May on a seasonally adjusted basis after falling 0.8 percent in April, the Bureau of Labor Statistics reports.

This is in line with my thinking for this phase of the lockdown. Things that consumers want are climbing in price, things they don't want, or can't buy because of the lockdown, are falling.

The gasoline index declined 3.5 percent in May, leading to a 1.8-percent decline in the energy index. People just aren't going to work, No surprise here.

But  the food index, in contrast, increased 0.7 percent in May as the index for food at home rose 1.0

Along with motor vehicle insurance and apparel, the indexes for airline fares and used cars and trucks declined in May. The indexes for shelter, recreation, medical care, household furnishings and operations, and new vehicles all increased. Alcoholic beverage prices rose for the month at an annualized rate of 6%.

As I have stated before, we may have another month, maybe two, of broad price inflation measures declining but that will be about it, then buckle your seat belts.

More analysis at the EPJ Daily Alert.


1 comment:

  1. The intellectuals-yet-idiots at the Fed must feel like they have failed in their mission.