CPI Rises Modest 0.2%, 2.5% from a Year Ago: Your Results May Vary Dramatically

Mike Mish Shedlock

The CPI rose 0.2% in April vs the economists' expectation of 0.3%. Year-over-year the CPI is up 2.5%.

The BLS reports the Consumer Price Index for all items rose 0.2% in April with energy commodities, shelter, and food fueling most of the gain.


  • The food index rose 0.3 percent in April after a 0.1-percent increase in March. The index for food away from home rose 0.2 percent in April following a 0.1-percent increase in March.
  • The index for food at home rose 0.3 percent, the largest increase since March 2017. The fruits and vegetables index rose 1.0 percent in April after declining in February and March. The index for meats, poultry, fish, and eggs increased 0.7 percent, with the index for eggs rising 7.1 percent and the beef index rising 1.3 percent. The index for dairy and related products also increased in April, rising 0.4 percent.
  • Nonalcoholic beverages fell 0.6 percent in April after rising in March. The index for cereals and bakery products fell 0.2 percent in April, and the index for other food at home was unchanged.


  • The energy index rose 1.4 percent in April after falling 2.8 percent in March. The gasoline index rose 3.0 percent following a 4.9-percent decline in March. (Before seasonal adjustment, gasoline prices increased 6.2 percent in April.) In contrast, the electricity index fell 0.6 percent in April, and the index for natural gas fell 0.4 percent.
  • The energy index increased 7.9 percent over the past year, with all the major component indexes rising. The gasoline index increased 13.4 percent and the fuel oil index rose 22.6 percent. The remaining component indexes increased more moderately; the electricity index increased 1.2 percent, and the index for natural gas advanced 1.0 percent.

All Items Less Food and Energy

  • The index for all items less food and energy increased 0.1 percent in April. The shelter index increased 0.3 percent, with the rent index rising 0.4 percent and the index for owners' equivalent rent increasing 0.3 percent. The index for lodging away from home increased 0.7 percent in April. The index for household furnishings and operations rose 0.5 percent in April, the largest increase since April 2015, and the personal care index increased 0.7 percent.
  • The apparel index rose 0.3 percent in April after declining in March, and the tobacco index increased 1.3 percent. The medical care index rose 0.1 percent in April, with the hospital services index rising 0.2 percent, the prescription drugs index increasing 0.1 percent, and the physicians' services index unchanged. The indexes for education and for alcoholic beverages also rose in April.
  • The index for used cars and trucks fell 1.6 percent in April, the largest decline since March 2009. The recreation index fell 0.4 percent, the largest decline since December 2009. The index for airline fares fell 2.7 percent in April, and the new vehicles index declined 0.5 percent. The index for motor vehicle insurance fell 0.2 percent, the first monthly decline since April 2017. The index for communication also declined 0.2 percent in April.
  • The index for all items less food and energy rose 2.1 percent over the past 12 months, the same increase as for the period ending March. The shelter index rose 3.4 percent over the last 12 months, and the medical care index rose 2.2 percent. Indexes that declined over the past 12 months include those for new vehicles, airline fares, used cars and trucks, and communication.

Year-Over-Year CPI

Your Results May Vary Dramatically

You results may be wildly different, especially on shelter and medical services. Supposedly, shelter is up 3.4% year-over-year and medical care services up only 2.2%.

Anyone paying for private healthcare insurance will be shaking their head at the alleged medical care increase.

Mike "Mish" Shedlock

Comments (5)
No. 1-5

Two comments about health care costs. One, the BLS notes that it’s extremely difficult to accurately measure the changes in health insurance premium payments.

“Challenges to pricing health insurance The current indirect method for measuring health insurance premium changes does not mimic the way consumers pay for health care and it forces the medical care indexes to measure changes in what medical care providers receive from insurance companies rather than what consumers pay for the medical items out of pocket…
…The CPI has tested the feasibility of directly pricing health insurance policies several times and each time showed that there were major barriers to obtaining data on changes in quality variables such policy benefits and utilization (the number of claims per insured). Consequently, BLS was unable to produce consistent constant-quality premiums for health insurance policies for use as CPI prices. BLS plans further research to find alternative methods for measuring health insurance premium inflation “

Second, the majority of the CPI for health care (Relative Importance) has to do with costs of treatments and nothing to do with insurance costs. You have to admit accurately measuring heath costs is not an easy task.


Jefferson D
Jefferson D

Since health care insurance and out of pocket costs has now become the highest or second highest monthly budget item for every non-subsidized American, seems like it should be key to the CPI instead of an afterthought.


So looking like Social Security should get another good boost this year.


With the Fed Funds rate at 1.5% nominal, that means it is negative 1% in real terms. The Fed "increases" aren't keeping pace with inflation, so they are actually decreases.
After careful consideration, I think Mish is wrong, and we are more apt to see a return of inflation, rather than more deflation. Inflation has been lower than you would expect for a long time for several reasons. The first is globalization, allowing manufacturing and customer support to move to the most efficient location. The second is in dramatic application of technology to increase the efficiency of distribution (i.e. Amazon, etc). The third has been lower oil prices.
Globalization is mostly done - the big savings is behind us. The same is true of increased efficiency of distribution. We may continue to buy more and more from Amazon, etc, but the items where we have the biggest savings from doing so, we are already buying there. Oil prices are rising again.
Thus, unless another major deflationary effect kicks in, we will return to inflation reflective of the state of deficit spending. Mish is counting on self-driving cars and robotics to provide that effect. I don't think it will be enough. These may moderate how fast inflation will rise, but I think that the deflation will not be a factor.

Steve Bull
Steve Bull

Here in Canada, the 'official' price inflation rate was 2.3%. What a joke. Here are a few of the price increases our family has experienced in the past year (2017 prices vs 2018 prices): physiotherapist +4.6%; chiropractor +13.2%; gasoline +4.7%; municipal taxes +3%; internet +46.7% (precious 'package' no longer available); social worker +16.7%; sports team (hockey) +6.7%; water +2.1%; wastewater +11.6%. The only item below the 2.3% fantasy was our water--something we were forced to accept (and pay $1000s for) when the municipality 'outlawed' water-well use in our area.

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