Core Consumer Prices Jump Most Since March 2006 Thanks To Surging Healthcare Costs

The market appears to have chosen the hotter-than-expected Core CPI print (as opposed to weakest headline CPI YoY print since Oct 2009 of -0.2%) as key. Core CPI rose 0.3% MoM in April – the most since March 2006; and 1.8% YoY – the most since Jan 2013. The biggest driver of the surge in consumer prices is medical care costs – which rose 0.7% – the biggest increase since January 2007 (thanks Obamacare).

Overall CPI is the lowest since Oct 2009…

But Core CPI is surging…

The Core CPI breakdown…

The index for all items less food and energy increased 0.3 percent in April, its largest increase since January 2013. The shelter index increased 0.3 percent, the same increase as in March. The indexes for rent, owners' equivalent rent, and lodging away from home all rose 0.3 percent. The medical care index rose 0.7 percent, its largest increase since January 2007. The index for medical care services rose 0.9 percent with the hospital services index rising 1.9 percent. The index for household furnishings and operations rose 0.5 percent, its largest increase since September 2008. The index for used cars and trucks increased 0.6 percent, and the new vehicles index rose 0.1 percent. The indexes for alcoholic beverages and for tobacco were both unchanged in April. The apparel index declined for the first time since December, falling 0.3 percent. The index for airline fares continued to decline, falling 1.3 percent after a 1.7-percent decline in March.

The index for all items less food and energy has risen 1.8 percent over the past 12 months, the same increase as for the 12 months ending March. This is slightly below its 1.9-percent annualized increase over the past 10 years. The shelter index has risen 3.0 percent over the last year, and the medical care index has advanced 2.9 percent. The index for airline fares fell 7.5 percent over the last year, and the indexes for apparel and for used cars and trucks have also declined.

As Medical Care Costs soared… 0.005% shy of the biggest MoM increase in healthcare costs in 21 years!

Thanks Obamacare

Charts: Bloomberg