01 Jun Viewpoints June 2021
The long-anticipated jump in U.S. inflation appeared this month, and with a vengeance. Core consumer price inflation increased nearly 3%, double the prior rate, while the month-on-month increase of 0.9% was roughly triple expectations. Prices in reopening-related areas showed the greatest increase, with lodging up 7.5% and airfares up 10.2%. Of note, a 10% jump in used car prices equaled one-third of the 0.9% monthly increase. More stable, and large, areas like rents were up just 0.2% and medical services prices actually fell slightly. Similarities exist with the post global financial crisis era (see chart). Prices jumped 2.2% by the end of 2011, after being up just 0.6% a year earlier. But inflation expectations bottomed in late 2008 at nearly 0% and jumped to 2.4% in just one year.
Read the full Viewpoints June 2021 newsletter.