Inflation Huge Miss: Core CPI Slides From 40-Year-High, Real Wages Tumble For 19th Straight Month

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It’s that time of the month again. The ‘most important’ CPI print in history, since the last ‘most important’ CPI print, is expected to show some moderation in October data (but remains at extremely high historical levels in both headline and core), and it did just that and then some:

The headline CPI printed far cooler than expected at +7.7% YoY (vs 7.9% exp) and down from the +8.2% in Sept. That is the lowest since January…

Source: Bloomberg

The index for all items less food and energy rose 0.3 percent in October, following a 0.6-percent increase in September. The shelter index continued to increase, rising 0.8 percent in October, the largest monthly increase in that index since August 1990. The rent index rose 0.7 percent over the month, and the owners’ equivalent rent index rose 0.6 percent. The index for lodging away from home increased 4.9 percent in October, after declining 1.0 percent in September.

The shelter index was the dominant factor in the monthly increase in the index for all items less food and energy; other components were a mix of increases and declines. Among the indexes that rose in October was the index for motor vehicle insurance which rose 1.7 percent in October after rising 1.6 percent in September. The index for recreation rose 0.7 percent over the month, following a smaller 0.1percent increase in the previous month. The new vehicles index increased 0.4 percent in October, and the personal care index rose 0.5 percent.

Indeed, even as real-time rents are now sliding, Rent/Shelter inflation continues to soar…

  • Rent Inflation 6.92%, highest on record, up from 6.59%
  • Shelter inflation 7.52%, highest on record, up from 7.21%

The shelter index accounted for over 40 percent of the total increase in all items less food and energy.

“And my God will meet all your needs according to the riches of his glory in Christ Jesus.” Philippians 4:19 NIV