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U.S. Inflation Tame, But Medical Costs And Rents Pushing Up

Tuesday, September 17, 2013 - 4:18 PM
From Reuters
U.S. consumer prices barely rose in August, but rising rents and medical care costs pointed to some stability in underlying inflation that could make the Federal Reserve more comfortable trimming its bond purchases.

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Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Tuesday, September 17, 2013 - 4:43 PM
Re: "rising rents and medical care costs"

That's par for the course. Rents are up because the housing market has rebounded.  Medical care costs have been rising faster than inflation for a number of years now and have risen particularly in recent months in anticipation of the Affordable Care Act going into effect.

Meanwhile, tapering may be a non-event:

“Inflation is way too low versus where the Fed is targeting it,” said Ray Remy,  head of fixed-income in New York at Daiwa Capital Markets America Inc., one of the 21 primary dealers that trade with the central bank. “It makes the case that tapering will be smaller, but it doesn’t take tapering off the table. The market is prepared for it and there’s no reason to go back based on all the groundwork they’ve laid.”
ShorebreakShorebreak2,699 posts since
Apr 6, 2010
Rep Points: 14,632
2. Wednesday, September 18, 2013 - 10:13 AM
Shorebreak, about rents, I mention: rents never went down, so the situation is not that they simply are going back to where they were, but they really have jumped up, and in at least some places, have skyrocketed. That is not par for the course, that is serious, real inflation. The housing sale market went down and is returning, but the rental market never went down.

I really think they need to seriously overhaul their method for measuring inflation. NOTHING at all that I deal with has been low inflation (except for savings account interest rates), everything I deal with has been up by double digits, from rent, to food, to gas, to health care, to even the **** vacuum cleaner bags I need for my vacuum, the price of which has gone up by 35% at the cheapest place I can find them!

I can't find anything that has not gone up in price accordingly. And I hear a lot of people chiming in with the same. So, how can they come up with such small inflation figures? It defies logic.
me1004me1004374 posts since
Jan 16, 2010
Rep Points: 2,604
3. Wednesday, September 18, 2013 - 10:26 AM
Forbes magazine article states healthcare costs have hit new lows for the last 4 years. 

 The surprisingly low spending projections come as the growth in healthcare spending has hit a new low for the fourth consecutive year.

New Data Suggests Obamacare Is Actually Bending The Healthcare Cost Curve - Forbes 
Ally6770Ally6770943 posts since
Jan 16, 2010
Rep Points: 2,742