May 19, 2021
INFLATION IS NOT A FUNCTION OF MONEY:
Reopening Drove Up April's Prices: Under the hood, April's US Consumer Price Index was far cooler than the headline read. (Fisher Investments Editorial Staff, 05/18/2021)
First, to be clear, we aren't referring to the 4.2% y/y inflation rate.[i] That, as we noted recently, was a garbage number--hopelessly skewed by the depressed April 2020 reading that serves as the denominator. Rather, we are referring to the 0.8% m/m rise--the largest since June 2009.[ii] Actually, without rounding, that figure was 0.77%.Underneath that headline number, there are a couple hundred or so subcategories. Five of them--used cars, car and truck rental, airline fares, admissions (to the movies and sports events) and lodging away from home (hotels/motels)--accounted for 0.448 percentage point of April's monthly increase. These five categories, which account for 5.061% of the overall CPI basket, accounted for more than half the monthly gain.
Posted by Orrin Judd at May 19, 2021 7:27 AM