The BLS reported that prices rose modestly in April, below consensus expectations.
The usually Bullish Michael T. Darda of MKM Partners was rather skeptical of the data:
From the CPI report, “In April, the index for petroleum-based energy fell 1.6%, offsetting a 2.5% increase in the index for energy services. The transportation index declined 0.7% in April, reflecting a 2.0% decrease in the index for gasoline.” And to top it off, the index of commodity prices rose just 0.1%.
Huh? Gasoline prices rose by about 10% in April. Virtually every index of commodity prices is near all-time highs (and up about 30% since the beginning of the year). I’m not sure what the BLS is smoking here, but it must be pretty strong stuff.
I have to agree.
As the chart below shows, Inflation ex "everything except personal computers, apparel, and household
furnishings" is looking great!
Charts by Jake
The easy way to disregard seasonal adjustments is to look at unadjusted
year over year changes.
As reported by the BLS for April 08 vs April 07:
Fuels and Utilities………….8.6%
Fuel oil and other fuels…….42.8%
(piped) and electricity…..6.6%