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Consumer Prices Rise Most Since May 2014, Led By Gas Prices & Shelter Costs

Following the first YoY deflation since 2009 in January, February's CPI YoY data managed to scrape its way back to unchanged (very modestly better than the 0.1% drop expected). Consumer prices rose 0.2% MoM - the most since May 2014 with gas prices up MoM for the first time since June. So what is the narrative now: if tumbling gas prices didn't get consumers to spend, rising gas costs will? Ex food and energy, prices rose 0.2% MoM (slightly hotter than the 0.1% rise expected) led by the shelter index (which increased 0.2 percent) accounting for about two-thirds of the monthly increase. The rent continues to be too damn high for most, and finally the BLS is starting to realize this.

MoM, Consumer prices have jumped from the worst drop since Lehman to the biggest jump since May 2014.

 

Deflation over?

 

Under the covers, gasoline prices rose MoM for the first time since June...

 

The details for those unlucky few who still eat and use gas (because yes, after sliding for seven straight months, gas prices are once again on the way up):

Food

The food index increased 0.2 percent in February. The index for food at home, which declined in January, rose 0.1 percent in February. Major grocery store food group indexes were split, with three increases and three declines. The index for nonalcoholic beverages increased 0.6 percent in February, its largest increase since September 2012. The index for other food at home, which declined in January, rose 0.5 percent in February. Also turning up in February was the index for meats, poultry, fish, and eggs, which rose 0.3 percent after declining slightly the prior month. The index for beef and veal rose 0.7 percent, its thirteenth consecutive increase. In contrast to these increases, the index for dairy and related products continued to fall, declining 1.0 percent after a 0.9-percent decrease the previous month. The index for fruits and vegetables declined 0.3 percent; the fresh fruits index rose 0.6 percent but the index for fresh vegetables declined 2.0 percent. The index for cereals and bakery products, which rose in January, declined 0.2 percent in February. The index for food at home has risen 2.9 percent over the past  year, with all six of the major grocery store food group indexes increasing over the span. The index for food away from home increased 0.3 percent in February and has risen 3.1 percent over the last 12 months.

 

Energy

 

The energy index rose 1.0 percent in February, ending a series of seven consecutive declines. The gasoline index turned up after a series of sharp declines, rising 2.4 percent. (Before seasonal adjustment, gasoline prices rose 5.3 percent in February.) The fuel oil index also increased after recent  declines, rising 1.9 percent. The electricity index rose 0.3 percent in February after a 0.9-percent increase in January. The only major energy component index to fall in February was natural gas, which declined 2.0 percent following a 3.4-percent decrease the prior month. Despite the February increases, the gasoline and fuel oil indexes have declined sharply over the past year, falling 32.8 percent and 31.2 percent, respectively. The index for natural gas has also declined over the past year, falling 6.5 percent, but the electricity index has increased 3.2 percent.

Finally, here are the bad news for everyone else, and those who actually have to purchase their shelter:

All items less food and energy

 

The index for all items less food and energy increased 0.2 percent in February. The shelter index increased 0.2 percent and accounted for about two-thirds of the monthly increase in the all items less food and energy index. The index for rent increased 0.3 percent, while the index for owners' equivalent rent rose 0.2 percent. The index for lodging away from home declined 0.5 percent after rising in January. The index for used cars and trucks turned up in February, rising 1.0 percent after declining in each of the four previous months. The apparel index rose 0.3 percent in February, the same increase as in January. The index for new vehicles advanced 0.2 percent, as did the index for airline fares, while the tobacco index rose 0.5 percent. The index for medical care was unchanged in February. The index for medical care commodities rose 0.7 percent, as the index for prescription drugs increased 0.6 percent. However, the index for medical care services declined 0.2 percent, its first decline since November 1975. The indexes for physicians' services and hospital services both decreased. The index for personal care, which rose in January, fell 0.4 percent in February.

So aside from all the rising prices, let's talk deflation.