There are two very troubling aspects of the latest BLS CPI report. Did you spot them?Month-Over-Month Shelter Percent ChangeShelter: 0.61 percentOwners’ Equivalent Rent: 0.53 percentRent of Primary Residence: 0.55 percentThose are all hot numbers. More importantly, the disinflationary trend in shelter appears to be over.CPI Year-Over-Year ShelterShelter Year-Over-Year Percent Change ShelterCPI: 3.8 percentShelter: 3.3 percentOwner’s Equivalent Rent: 3.3 percentRent of Primary Residence: 2.8 percent Components of CPI Percentage WeightsShelter is 35.32 percent of the CPI.It’s difficult to have CPI disinflation with rising shelter. It’s nearly impossible to have disinflation with shelter, food, and energy all jumping.CPI Month-Over-MonthCPI Month-Over-MonthAll Items: 0.64 percentAll Items Excluding Food and Energy: 0.38 percentFood and Beverage: 0.49 percentShelter: 0.61 percentOwners’ Equivalent Rent: 0.53Rent of Primary Residence: 0.55Medical Care Services: 0.00 percentMedical Care Commodities: -0.35 percentEnergy: 3.81 percentGasoline: 5.44 percentFood at Home: 0.68 percentFood Away from Home: 0.23That list is the second troubling aspect of the report.Inflation is very broad-based.Medical care was the only good aspect of the report. Medical care commodities are only 1.45 percent of the CPI. Medical Care Services are 6.893 percent of the CPI.Nothing else looks any good.Looking AheadYear-over-year numbers are heavily influenced by month-over-month numbers a year ago.The all-items CPI rose 0.10 percent in May of 2025. All Items excluding food and energy rose 0.13 percent in May of 2025.Numbers higher than the above will make the year-over-year number rise.Does anyone think we will not have another year-over-year blast still higher next month?I believe we are going to see reported year-over-year inflation about 4.2 next month up from 3.8 percent. And if energy misbehaves, not even 4.5 percent would be shocking.For more discussion of the April CPI, please see CPI Hotter than Expected, Highest in Three Years, a Genuine DisasterInflation in April was another scorcher. Here are some month-over-month and year-over-year charts.Original Post