March 12, 2020
I had some family matters, so I couldn’t do my usual prices byte this morning, but now that I have had the chance to see the CPI report, I know the story would have been the usual. Inflation is well-contained pretty much everywhere, but health insurance costs are out of control.
The overall CPI rose just 0.1 percent for the second straight month, while the core rate rose 0.2 percent, also the same as the prior month. The increases for the last year in the overall CPI and the core are 2.4 percent and 2.3 percent, respectively.
Shelter continues to be an area of excessive inflation, with costs rising 0.3 percent in February and 3.3 percent over the last year. That is a problem, but not a new one. This has been the rate of inflation in shelter for the last four plus years. There has been some change in the distribution of increases, with rental inflation in some of the East coast cities slowing and inflation in the West increasing, but there has been remarkably little change in the national average over this period.
By contrast, the cost of health insurance is soaring out of control. The index went up another 1.4 percent in February, bringing its increase over the last year to 20.7 percent. Again, this is not the increase in premiums, the CPI index just measures the portion of insurance spending that goes to profits and administrative costs. These costs are clearly way out of control.