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Friday, March 29, 2024

Inflation: A Five-Month X-Ray View: New Update

Courtesy of Doug Short.

Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past five months. I’ve also included each of the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation.

We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components. Some of us have higher transportation costs, others medical costs, etc.

The most conspicuous trend in the table, data through July, had been the amazing decline in energy, which accounted for the shrinking Transportation component as well as Headline CPI. Over the past several weeks, gasoline prices have been on the rise, and that now reflected in the year-over-year data in the table. The August energy number is still negative, but dramatically less so.

The Trends in Headline and Core CPI

The chart below shows Headline and Core CPI for urban consumers since 2007. Core CPI excludes the two most volatile components, food and energy.

 

 

Year-over-year Core CPI made a moderate arc above the 2% benchmark beginning October, but it has now slipped fractionally below at 1.91%. The more volatile Headline CPI, which had been falling since last October, has now risen YoY for the first time in ten months, although it remains below 2% at 1.69%. The reversal is largely the result of rising gasoline prices, which have finally impacted the YoY data (more on gasoline here).

For a longer-term perspective, here is a column-style breakdown of the inflation categories showing the change since 2000.

 

 

Note: For additional information on the component composition of the Consumer Price Index, see my Inside the Consumer Price Index.

 

 

 

 

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