Used-Car Prices Soar As Shelter/Rent Costs Slow In September CPI Data

Used-Car Prices Soar As Shelter/Rent Costs Slow In September CPI Data

Tyler Durden

Tue, 10/13/2020 – 08:40

Consumer prices were very mixed in September with headline CPI accelerating to +1.4% YoY and core CPI decelerating to +1.7% YoY.

Source: Bloomberg

The three most important factors for Americans – food, shelter, and energy costs – were a mixed bag:

The most notable driver on the downside was shelter/rent inflation collapsing:

  • Shelter inflation up 2.04% Y/Y, lowest since Feb 2012
  • Rent inflation up 2.72% Y/Y, lowest since April 2013

The energy index fell 7.7 percent over the past 12 months with its component indexes mixed. The gasoline index decreased 15.4 percent and the fuel oil index fell 27.2 percent. In contrast, energy service indexes rose, with the index for natural gas increasing 3.8 percent and the index for electricity advancing 0.7 percent.

The food index was unchanged in September after rising 0.1 percent in August. The index for food at home fell 0.4 percent in September as five of the six major grocery store food group indexes declined. The index for nonalcoholic beverages fell 0.8 percent, its largest monthly decline since December 2010. The index for other food at home declined 0.6 percent in September after rising 0.5 percent in August. The index for dairy and related products declined 0.5 percent in September after rising 1.5 percent in August.    

Despite the September decline, the food at home index increased 4.1 percent over the last 12 months. All six major grocery store food group indexes rose over that span, with increases ranging from 2.6 percent (cereals and bakery products) to 6.3 percent (meats, poultry, fish, and eggs). The index for food away from home rose 3.8 percent over the last year. The index for limited service meals increased 5.5 percent and the index for full service meals rose 2.8 percent over the last 12 months. 

The index for food away from home continued to rise, increasing 0.6 percent in September. The index for limited service meals rose 0.9 percent in September, the largest increase in the history of the index, which dates to 1997. The index for full service meals rose 0.3 percent in September.

Additional drags included motor vehicle insurance, which declined in September, falling 3.5 percent. The index for airline fares fell 2.0 percent in September after rising in each of the previous 3 months. The apparel index also turned down in September,  falling 0.5 percent after rising the last 3 months. The education index fell 0.3 percent in September, the same decline as in August. The index for household furnishings and operations fell slightly in September, declining 0.1 percent after rising 0.9 percent in August. The indexes for communication and for alcoholic beverages also declined in September. 

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As was the case last month, the index for used cars and trucks was the dominant factor to the upside; it rose 6.7 percent in September following a 5.4-percent increase in August.

The used cars and trucks index accounted for more than 100 percent of the monthly increase in the index for all items less food and energy.

The index for new vehicles increased 0.3 percent in September after being unchanged in August. The recreation index rose 0.2 percent in September after rising 0.7 percent in August. The medical care index was unchanged in September with its components mixed; the hospital services index rose 0.6 percent, while the physicians’ services index declined 0.3 percent and the prescription drugs index fell 0.1 percent.

Crucially, Goods prices are accelerating as Services price growth is slowing rapidly…

Source: Bloomberg

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Author: Tyler Durden

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