January Inflation and Housing Numbers

After today's data, I doubt even Bob Brinker can continue to say inflation is low. The US Labor Department reported inflation as measured by the Consumer Price Index (CPI) remained elevated in January. Selected highlights of the details at Consumer Price Index Summary:

• January CPI up 0.4%. In the past when this was only 0.1%, Bob Brinker has "annualized" this number by multiplying it by 12. Multiply 0.4% by Bob's 12 and we get an annualized inflation rate of 4.8%!
  
• Due to seasonal effects, December CPI was revised up to 0.4% from its earlier estimate of 0.3%
  
• Excluding volatile food and energy, January Core CPI was up 0.3%, the largest gain since June 2006
  
• Year-over-year CPI up 4.3% in January.
  
• Year-over-year core inflation is up 2.5% over the same period, the fastest pace since February 2007.

Inflation Details from CBS Marketwatch:

• Energy prices rose 0.7% in January after much larger increases in the past two months.
• Gasoline prices rose 1.2% after seasonal adjustment. Natural-gas prices rose 2.2%.
• Food prices rose 0.7% in January, the largest increase since last February.
• The gain in the core rate reflects accelerated prices for apparel, medical care, recreation, and education.
• Shelter prices, which represent about 30% of the CPI, rose 0.3% in January.
• Transportation prices rose 0.5%, led by higher fuel prices.
• Medical-care prices increased 0.5%, as prescription drug prices rose 0.7%, the largest gain in a year.
• Apparel prices rose 0.4% after seasonal adjustments. Airline fares rose 0.8% in the month.
• Food prices were unchanged in January.

Housing

Housing Starts UP 0.8% vs down 14.8% in Decenmber

Building Permits down 3.0% vs down 7.1% in December. On a seasonally adjusted basis, building permits are running at a rate of 1.08M, the lowest reading since November 1991!

Slow single family housing means people need appartments to live in. Single-family housing starts fell by 5.2% in January, but starts on structures with two or more units rose by 22.3%.

Yesterday the National Association of Home Builders (NAHB) reported that the mood of U.S. homebuilders improved slightly for a second straight month. The NAHB reported their home builders' housing market index rose to 20 in February from 19 in January.

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