Rents Boost CPI, Jobless Claims Rise: U.S. Economic Takeaways

  • Shelter costs increased in May by most since February 2007
  • Unemployment benefit filings boosted by jump in California

What you need to know about Thursday’s U.S. economic data:


  • Rose 0.2 percent (forecast was 0.3 percent) after 0.4 percent gain
  • Core CPI, which excludes food and fuel, also climbed 0.2 percent for a second month
  • Increase in core driven by biggest advance in shelter costs, up 0.4 percent, since February 2007
  • CPI rose 1 percent in last 12 months; core CPI up 2.2 percent

The Takeaway: Inflation is creeping higher, but the primary source is rising shelter costs. Over the past 12 months, 60 percent of the increase in core consumer prices could be traced back to rents, lodging costs and rental equivalent of owner-occupied houses, the Labor Department said. While Federal Reserve policy makers expect inflation to move toward their goal in the medium term, any meaningful progress needs to include broad-based gains. In that respect, the CPI report showed few signs of building price pressures as the costs of vehicles, airfares, furniture and televisions declined from a month earlier. Another category that was propping up the core is also looking less promising now: Some health care components from the producer price index that feed into the Fed’s preferred gauge of inflation actually declined in May…

Rents Boost CPI, Jobless Claims Rise: U.S. Economic Takeaways

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