January 12, 2022
The overall Consumer Price Index (CPI) was up 0.5 percent in December, and the core up 0.6 percent. Year-over-year, the overall CPI is up 7.0 percent, core 5.5 percent.
Supply chain problems are still pushing up the price of a wide range of items, especially cars. This will be a big problem until it is resolved.
Car prices again are a big factor in the rise of inflation. New car prices were up 1.0 percent, 11.8 percent year-over-year. Used car prices were up 3.5 percent, 37.3 percent year-over-year. The car insurance index fell 1.5 percent in December, now 1.0 percent below the pre-pandemic level.
Medical care services were up 0.3 percent in December, 2.5 percent, year-over-year. Drug prices were up 0.1 percent in December, flat year-over-year.
In what may be a Biden victory over monopolistic meatpackers, meat prices fell 0.9 percent, but prices are still up 14.8 percent year-over-year.
Food at home rose 0.4 percent in December, and food away from home rose 0.6 percent. Year-over-year, food at home was up 6.5 percent, and food away from home was up 6.0 percent. This reverses the normal pattern where food away from home prices rise more quickly.
Apparel was up 1.7 percent in December, now up 0.6 percent from the pre-pandemic level. These are mostly imports, so the higher dollar should be putting downward pressure on prices. The story is similar with household furnishings and supplies, which were up 1.3 percent in December and 7.4 percent year-over-year.
Television prices fell another 2.5 percent in December after rising 10.2 percent from March to August. Television prices have fallen 6.5 percent in the last four months. This is a pattern we may see in 2022 for other items with supply chain issues.
Rental inflation accelerated, with both rent proper and owner equivalent rent up 0.4 percent in December and up 3.3 percent and 3.8 percent, respectively, year-over-year. We are continuing to see a pattern of rapid rent increases in low-cost areas and slowing rises in high-cost areas. Detroit rent was up 6.7 percent year-over-year, Atlanta was up 8.1 percent. By comparison, New York City rent is up just 0.2 percent year-over-year, Boston 1.6 percent, Washington, DC 0.5 percent, and San Francisco is down 0.3 percent.