Consumer prices were flat in September and core CPI rose less than expected. Housing and medical services are problems.

Inquiring minds are looking at today's Consumer Price report for signs of inflation.

CPI Highlights

  • The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in September on a seasonally adjusted basis after rising 0.1 percent in August.
  • Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.
  • Increases in the indexes for shelter and food were offset by declines in the indexes for energy and used cars and trucks to result in the seasonally adjusted all items index being flat.
  • The energy index fell 1.4 percent as the gasoline index declined 2.4 percent. The food index increased 0.1 percent in September after being unchanged in each of the prior 3 months.
  • The index for all items less food and energy rose 0.1 percent in September after increasing 0.3 percent in each of the last 3 months. Along with the shelter index, the indexes for medical care, household furnishings and operations, and motor vehicle insurance all rose in September.
  • The indexes for used cars and trucks, apparel, new vehicles, and communication all declined.
  • The food index increased 1.8 percent over the last year, while the energy index decreased 4.8 percent.


In Search of Inflation


Anyone buying their own health care insurance or electing to to have any will look at that alleged 4.4% rise and think it's a joke.

CPI vs Medical Services and OER Year-Over-Year


Owners Equivalent Rent (OER) is another problem area. Since 2012, rental prices have risen much faster than the CPI.

The cost of medical services nearly always rises faster the the CPI.

Families Suffering Despite Alleged Low Inflation

Assuming one ignores rising credit card usage, increasing debt, bankruptcies, suicides, and the 68% of millennials who regret not buying a home ....
then consumers are not struggling

Mike "Mish" Shedlock @MishGEA

The tariffs aren't causing consumers to struggle.

Redbook yearly same store sales growth in the past 3 weeks.

August 24: 5.7%
August 31: 6.5%
September 7: 6.4%


Employer Healthcare Costs Jump to $20,000 - Not Inflation?

Please note the average Employer Healthcare Costs Jumped to $20,000.

Uninsured Rate Jumps

On September 16, I reported the Percentage of Healthcare Uninsured Jumps From 8.0% in 2017 to 9.1% in 2019.

68% of Millennial Homeowners Regret Buying a Home

The BLS does not consider the price of housing as a consumer price, only rent.

Rent is outstripping wages and the price of houses even more so.

As noted in American Dream, 68% of Millennial Homeowners Regret Buying a Home.

Inflation Magic

Low inflation is imaginary for those buying their own health insurance, for those looking to buy a home, for those in college, and many others, too.

And of course the BLS does not count economic bubbles and the Fed does not even see them


This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD nears weekly highs as risk-on returns

The EUR/USD pair was dragged higher by a soaring Pound, now hovering around 1.1040. The market is all about sentiment, and this last dependent on Brexit and the US-China trade relationship.



GBP/USD surges to 5-month highs on reports of a draft Brexit deal

GBP/USD has leaped toward 1.28, hitting the highest since May. Reports suggest that the UK and the EU are zooming in on a deal. Details are awaited and negotiations continue.


USD/JPY in search of a firm direction, stuck in a range below mid-108.00s

The prevalent risk-on mood weighed on the JPY’s safe-haven status and extended support. A sharp fall in the US bond yields undermined the USD and failed to impress bullish traders.


Cryptos: Incumbents don't know to play well

The Libra project led by Facebook remains on track despite the first defections. Those who have abandoned the project are mostly payment gateways. Bitcoin's lack of tone weighs on Ethereum's mood.

Read more

Gold slumps to $1,480 area on Brexit hopes

The troy ounce of the precious metal continued to weaken in USD terms in the American trading hours as markets cheered reports claiming that the European Union (EU) and the United Kingdom (UK) are closing in on a draft Brexit deal that could be announced before the end of the day on Tuesday.

Gold News

Forex Majors