US inflation to rise due to health insurance

A popular US inflation measure is projected to see a tiny increase due to a revision in the government's estimate of health insurance prices. This reversal of trend follows a period of relief in recent months.

A few modifications to the way the Bureau of Labor Statistics tabulates the category will be implemented starting with the October release of the consumer price index. The new technique will try to smooth out some of the volatility and minimize time lags in the index in addition to a routine adjustment in the source data. The new calculation is expected to drive up the headline CPI, at least temporarily, after serving as a consistent brake on overall inflation for the previous year. It will also increase the inflation of a more limited collection of services, namely housing and energy.

Although it computes it using independent price index numbers found in the personal consumption expenditures and income report, the Federal Reserve closely monitors so-called core services.