US Inflation Tracker

The US Inflation Tracker captures the trends that provide context in today’s economy.

While inflation may still feel high to many consumers, July’s Consumer Price Index (CPI) data shows inflation is returning to the 2% level – right where the US Federal Reserve prefers it to be.
 

Core inflation (ex-shelter) tracking around 2%

When excluding shelter, and its accompanying lagged effects, from core consumer price inflation, we see that the year-over-year core consumer prices have basically settled right around a 2% level for some time. To be more precise – 13 months and counting.

Core Consumer Price Inflation ex-Shelter (9/30/14–7/31/24)

Downshift in motor vehicle insurance costs?

Motor vehicle insurance has been a thorn in the side of inflation for some time. The April inflation print marked the high point in motor vehicle insurance, with premiums rising almost 23% on a year-on-year basis. This single line item alone has been accounting for more than 50% of the monthly increase in inflation, in select months. As we’ve highlighted before, motor vehicle insurance is a function of vehicle prices and repair costs. The surge in insurance prices was a function of the lagged catch-up in premiums to the rise in new and used vehicle prices, parts, and repair costs over the past four post-Covid years.

We believe that catch-up has finally played out – as there’s been a steady drop in the past three inflation reports. What was once a major headwind has now flipped and looks set to continue to normalize. This means a steady reduction in that year-on-year number, adding to the disinflationary trend that looks to be gaining momentum.
 

Motor vehicle insurance–related Consumer Price Inflation (1/13/19–7/3124)

Resource

US Inflation Tracker – August 2024

This in-depth chart deck highlights historical data related to:

• Personal consumption
• Inflation surprises
  
• Goods and services
• Base effects and surges
• Supply chain, shipping, and restocking
• Housing market pressures
• Wage pressures
• Inflation expectations

Learn more

Curious to learn how the fixed income markets are evolving?