The Consumer Price Index numbers released Friday showed inflation levels increasing 0.2%, which is slightly better than investors expected. Part of the rise was attributed to the so-called core inflation index, minus food and energy prices, which increased 0.3% in August. The all items index rose to 1.1% for the 12 months, still below the target rate of 2% the Fed has set.
According to the Bureau of Labor’s report, the energy and food indexes went unchanged in August. There were price increases for shelter, vehicle insurance, apparel, communication, and tobacco. However used vehicles, household furnishing, recreation, and airline fares all declined.
According to Bloomberg, medical costs saw their biggest jump since 1984. Medical care rose 1% while the cost of prescription drugs also soared 1.3%, bringing the increase in prices over the past year to a total of 6.3%.
It seems the CPI numbers are bringing in a mixed bag for investors and a little more justification for the Fed to consider a hike this year. But there’s more to these inflation numbers than meets the eye.
This post was published at Schiffgold on SEPTEMBER 19, 2016.