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Overall CPI Up 0.6 Percent Driven by Bounce Back

Overall, the story this month is overwhelmingly that bounce back inflation was 100 percent predictable, coupled with soaring car prices (both new and used) due to temporary shortages. There’s not much here to get excited about.

  • The overall CPI was up 0.6 percent, the core rose 0.7 percent. New and used cars were major factors, rising 1.6 percent and 7.3 percent, respectively. The jump in used and new car prices added 0.3 percentage points to the inflation rate for the month.

  • Even though it’s hard to get good help, restaurant prices outpaced food prices by just 0.1 percentage points over the last three months, 1.0 percent to 0.9 percent.

  • The medical care index fell 0.1 percent in May, up just 0.9 percent over last year. Drug prices were flat, down 1.9 percent over last year.

  • Rent indexes: rent proper increase just 0.2 percent; owner equivalent rent rose 0.3 percent in May.

  • Apparel prices jumped 1.2 percent in May, car insurance 0.7 percent, and air fares 7.0 percent. The indexes are respectively 2.2 percent, 0.2 percent,, and 6.3 percent below the February 2020 level.

(This is a compilation of Dean Baker’s quick-take analysis over Twitter. Follow @DeanBaker13 on Twitter to get his quick-take analysis of government data immediately upon release.)

 



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