Re-Inflation Continues – November Consumer Prices Surge Most Since April

Having accelerated MoM for the past four months, analysts expected today’s CPI print (for November) will rise once again to +0.3% MoM and they were dead on (the biggest MoM rise since April). The 0.3% MoM rise pushed headline CPI up 2.7% YoY – the highest since July…

Source: Bloomberg

Core CPI also rose 0.3% MoM (as expected) which pushed it up 3.3% YoY (not even close to the 2% mandate)…

Source: Bloomberg

There has not been a single monthly decrease in core consumer prices since Biden too office.

There is a silver lining however, with so-called SuperCore CPI – Services Ex Shelter – rising just 0.19% MoM which leaves it +4.3% YoY (the lowest inflationary print since Dec 2023)…

Source: Bloomberg

Services inflation continues to slow (but remains very hot) as goods deflation is rapidly reversing…

Source: Bloomberg

On a three-month annualized basis, it is only energy’s deflation that is holding CPI back from a much bigger surge with Food Costs up nearly 4%…

Source: Bloomberg

CPI Highlights:

• The index for shelter rose 0.3 percent in November, accounting for nearly forty percent of the monthly all items increase.

• The food index also increased over the month, rising 0.4 percent as the food at home index increased 0.5 percent and the food away from home index rose 0.3 percent.

• The energy index rose 0.2 percent over the month, after being unchanged in October.

CPI Core:

• The index for all items less food and energy rose 0.3 percent in November, as it did in each of the previous 3 months.

• Indexes that increased in November include shelter, used cars and trucks, household furnishings and operations, medical care, new vehicles, and recreation.

• The index for communication was among the few major indexes that decreased over the month.

Details:

The index for all items less food and energy rose 0.3 percent in November, as it did in the preceding 3 months.

• The shelter index increased 0.3 percent in November. The index for owners’ equivalent rent rose 0.2 percent over the month, as did the index for rent, the smallest 1-month increases since April 2021 and July 2021, respectively.

  • The lodging away from home index rose 3.2 percent in November, after rising 0.4 percent in October

• The medical care index increased 0.3 percent over the month, the same as it did in October. The index for physicians’ services increased 0.3 percent in November, while the prescription drugs index fell 0.4 percent over the month.

  • The hospital services index was unchanged in November.

• The used cars and trucks index rose 2.0 percent in November, after rising 2.7 percent in the previous month.

• The index for household furnishings and operations rose 0.6 percent over the month as did the index for new vehicles.

• Other indexes that increased in November include recreation, education, personal care, and apparel. In contrast, the index for communication fell 1.0 percent in November after falling 0.6 percent in October and September.

The index for all items less food and energy rose 3.3 percent over the past 12 months.

• The shelter index increased 4.7 percent over the last year, the smallest 12-month increase since February 2022.

• Other indexes with notable increases over the last year include motor vehicle insurance (+12.7 percent), medical care (+3.1 percent), education (+4.2 percent), and recreation (+1.5 percent).

With money supply on the rise again, it should be no surprise that inflation is also rising phoenix-like from the ashes of a pre-election money tsunami…

Source: Bloomberg

Is this what Trump is about to inherit?

Source: Bloomberg

Amid all the rancor of the election campaigns about how voters are clueless as to just how good they’ve got it – which was echoed by Jared Bernstein this morning on CNBC – Americans (as a whole) have seen real incomes drop 3.3% in the four years since Biden was elected (and up just 2% since the start of COVID)…

Source: Bloomberg

Of course, this includes EVERY American and is adjusted by EVERY item in the BLS CPI basket… how about we adjust nominal incomes for what really matters – food and fuel costs?

Finally, strong employment and resurgent inflation ‘data’ is not the kind of ‘data’ that a ‘data dependent’ Fed needs to justify rate-cuts next week? Or is this resurgence transitory?