Fed is not making much progress anymore
This article first appeared on SchiffGold.
This analysis takes the BLS inflation data and recalculates the percentage changes at the category level to get unrounded numbers. The total number ties to the BLS, but it gives more detail at the granular level.
Below is the inflation data that has been taken from the BLS. After bottoming in October of last year at 0.08%, the monthly number is now at .31% which is below the last 3 months but also still running at an annualized rate of 3.7%. While the monthly number was below expectations, it’s very clear to see that we are at a new level of sticky inflation.
Figure 1: Month Over Month Inflation
The YoY CPI has been near the low 3% range since June of last year but it has picked back up over the last two months. This is not unexpected as the 0.09% monthly increase from March of last year fell off. Next month will also likely see an uptick in the annual number as the 2023 May 0.11% falls off.
Figure 2: Year Over Year Inflation
Looking at the individual categories relative to history, it is clear that Energy is having an outsize effect and that shelter still remains elevated at 0.38% which is 4.7% annualized rate.
Figure 3: MoM vs TTM
The table below gives a more detailed breakdown of the numbers. It shows the actual figures reported by the BLS side by side with the recalculated and unrounded numbers. The weighted column shows the contribution each value makes to the aggregated number. Details can be found on the BLS Website.
Month over Month Data (MoM) | Year over Year Data (YoY) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Category | Weighting | BLS Reported | Aug 2024 | Jul 2024 | MoM Diff | Aug 2024 | BLS Reported | Aug 2024 | Aug 2023 | YoY Diff | Aug 2024 |
Commodities | 18.4 | 0.0 | 0.05 | -0.40 | 0.44 | 0.01 | -1.9 | -1.86 | 0.23 | -2.09 | -0.39 |
Education | 5.0 | 0.4 | 0.43 | 0.16 | 0.27 | 0.02 | 2.3 | 2.27 | 2.57 | -0.30 | 0.11 |
Energy | 6.9 | -1.8 | -1.83 | 0.42 | -2.24 | -0.13 | -4.0 | -3.98 | -3.62 | -0.36 | -0.29 |
Food | 13.4 | 0.1 | 0.06 | 0.26 | -0.20 | 0.01 | 2.1 | 2.05 | 4.25 | -2.20 | 0.27 |
Medical Care | 6.5 | 0.1 | 0.13 | -0.31 | 0.44 | 0.01 | 3.2 | 3.21 | -2.14 | 5.35 | 0.20 |
Other | 1.5 | 0.2 | 0.20 | 0.26 | -0.06 | 0.00 | 4.6 | 4.61 | 6.38 | -1.77 | 0.07 |
Recreation | 3.2 | 0.0 | 0.01 | 0.40 | -0.40 | 0.00 | 3.2 | 3.24 | 6.10 | -2.86 | 0.10 |
Household Ops | 1.0 | 0.3 | -0.63 | 1.66 | -2.29 | -0.01 | 4.9 | 7.42 | 7.26 | 0.16 | 0.07 |
Shelter | 36.4 | 0.4 | 0.43 | 0.33 | 0.10 | 0.16 | 5.2 | 5.23 | 7.27 | -2.04 | 1.82 |
Transportation | 6.5 | 0.1 | 0.09 | -0.31 | 0.39 | 0.01 | 7.9 | 7.89 | 10.35 | -2.46 | 0.47 |
Waste Mgmt | 1.1 | 0.4 | 0.40 | 0.48 | -0.08 | 0.00 | 4.2 | 4.24 | 5.82 | -1.58 | 0.05 |
Total Weighted | 99.9 | 0.2 | 0.08 | 0.12 | -0.03 | 2.5 | 2.47 | 3.68 | -1.21 | ||
Data as of: Aug 2024. All values are in %. The Weight columns show the contribution after weighting.The weighted columns do not show totals because it would be redundant to the total in the recalc. Household Ops has been reported inconsistently so is not entirely reliable. | |||||||||||
The Fed uses a different category methodology than the BLS, but the total number ties. Below shows the number as reported by the Fed. According to the Fed categories, 6 of 8 categories are above the 12 month trend. Apparel had a massive move the upside in the latest month. Only Food and Shelter are below the 12-month trend.
Figure 4: Current vs History
Below is a much longer view of inflation and interest rates from the Fed and BLS (at the aggregate level, the data is the same).
Figure 5: Fed CPI
The BLS categorical data can be seen below. Again, this does not look like a wave that is ready to drop to 3% anytime soon. It looks more like a drop before another increase.
Figure 6: Historical CPI
Data Source: https://www.bls.gov/cpi/ and https://fred.stlouisfed.org/series/CPIAUCSL
Data Updated: Monthly within first 10 business days
Last Updated: Aug 2024
Interactive charts and graphs can always be found on the Exploring Finance dashboard: https://exploringfinance.shinyapps.io/USDebt/