Big Jumps in Food and Energy Prices Push Inflation Higher in October

11/10/2021 12:00am

  • Overall Consumer Price Index (CPI) was up 0.9 percent in October. The core rate was up 0.6 percent.

  • Car prices are still rising rapidly; new vehicle prices up 1.4 percent, 9.8 percent year-over-year; used car prices up 2.5 percent, 26.4 percent year-over-year.

  • Television prices fell 2.2 percent in October, after dropping 0.6 percent in September, but still up 10.4 percent year-over-year.

  • Rent proper was up 0.4 percent in October, 2.7 percent year-over-year. Owner equivalent rent was also up, 0.4 percent, 3.1 percent year-over-year.

  • Rent proper was up 1.5 percent year-over-year in Boston and LA; 1.7 percent in Seattle; 0.2 percent in NYC; and down 0.3 percent in DC and 0.4 percent in SF. By contrast, it is up 6.3 percent in Detroit and 7.5 percent in Atlanta. This is consistent with people moving from high priced cities to lower priced ones.

  • Milk prices were flat in October, up 4.3 percent year-over-year.

  • Food at home prices were up 1.0 percent in October, 5.4 percent year-over-year. The 5.4 percent increase in food at home prices was the largest since the 5.6 percent increase in June 2020. Before that, it is necessary to go back to December 2011 when the year-over-year increase was 6.0 percent.

  • It is interesting that food at home prices went up slightly more year-over-year than restaurant food (5.4 percent compared to 5.3 percent). It looks like pay increases for restaurant workers are not being passed on to consumers.

  • Medical services rose 0.5 percent in October after falling 0.1 percent in September, the year-over-year increase is just 1.7 percent. Drug prices rose 0.6 percent in October, but still down 0.7percent year-over-year.

  • College tuition is flat in October, up 1.8 percent year-over-year.

  • Toy prices were flat in October, down 0.4 percent year-over-year.

Overall, we are still seeing supply chain problems in a big way, reflected most clearly with cars. The big increases here will be reversed, as is the case now with televisions. There are no grounds for slamming on the brakes at the Fed.

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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