With the world's eyes having moved on fromChina's rip-roaring PPI (and post-data decision to unleash price controls), this morning's CPI print has been heralded as the arbiter of "is it transitory or not" with some (BofA) even suggesting we are nearing a period of "transitory hyperinflation." The answer for now is - inflation's still accelerating as headline CPI soared 5.0% YoY (hotter than the +4.7% expected). That is the highest level of inflatuion since Aug 2008.
Source: Bloomberg
But it is core CPI that is the huge outlier, soaring 3.8% YoY - the hottest level of inflation since 1992...
Source: Bloomberg
Goods prices are up 6.5% YoY - the highest since 1982- and services prices are also accelerating significantly.
Source: Bloomberg
Under the hood, many of the same indexes continued to increase, including used cars and trucks, household furnishings and operations, new vehicles, airline fares, and apparel. The index for medical care fell slightly, one of the few major component indexes to decline in May.
The household furnishings and operations index increased 1.3 percent in May, itslargest monthly increase since January 1976.
The index forused cars and trucks continued to rise sharply, increasing 7.3 percent in May. This increase accounted for about one-third of the seasonally adjusted all items increase.
Source: Bloomberg
The index fornew vehiclesrose 1.6 percent in May, itslargest 1-month increase since October 2009. The index for airline fares continued to increase, rising 7.0 percent in May after increasing 10.2 percent the prior month. The apparel index also rose in May, increasing 1.2 percent.
The index forcar and truck rentalscontinued to rise, increasing 12.1 percent after rising 16.2 percent the prior month (and more thandoubled over the past 12 months, rising 109.8 percent).
Notably - amid all the headlines of soaring food prices and supply chains -the BLS believes food price inflation is slowing...
Source: Bloomberg
Finally, rent/shelter inflation remains subdued
MoM: The shelter index rose 0.3 percent in May. The index for rent rose 0.2 percent and the index for owners’ equivalent rent increased 0.3 percent
YoY: The shelter index increased 2.2 percent over the last 12 months.
So, Transitory or not?