Inflation dished up another nasty surprise. Other costs jumped too. Gasoline didn’t help. This was a broad-based mess.
Month-to-month CPI spikes, core CPI and core services CPI accelerate, despite ongoing massive health insurance adjustment.
“Disinflation” already ended.
“Disinflation” honeymoon was nice, thank you, but it’s over.
Durable goods prices fall. Fed favored “core” PCE price index re-accelerates.
Fretted about the re-accelerating economy flying above the “below-trend” growth required to get to 2%. “We will keep at it until the job is done.”
“Higher for longer be damned”: consumers and businesses.
But motor fuel prices plunge, and inflation in durable goods and food cools – same as everywhere.
Core services inflation at 6.1% year-over-year; Core CPI at 4.7%. Three factors make it rough for CPI the rest of the year.
It turned Medical Services CPI negative, pushed down core services CPI, core CPI, and overall CPI. But it will swing the other way in October.