Inflation Surging Higher in February US CPI +7.9% y/y largest Increase in Forty Years

US CPI in February rose 0.8% m/m (consensus +0.8%). Core CPI rose 0.5% (consensus +0.5%). On a year-over-year basis, total CPI is up 7.9% (versus 7.5% in January) and core CPI is up 6.4% (versus 6.0% January). Inflation remains persistently high as Central Bankers keep trying to reassure us that soaring inflation will come under control. The surge in energy costs due to war in Ukraine is still to come. Pressure is on the Fed to begin moving aggressively when officials meet next month.

Inflation

February marked the seventh time in the past 11 months that the core CPI rose at least 0.5% over the month before. 

Increases in the cost of food, electricity and shelter were the largest contributors to the monthly rise, the Labor Department said, with both the food and energy indexes rising 0.9% over the month. Groceries were a significant driver, with the food at home index rising 1.0% over the month after a 0.4% rise the month before, driving prices up 7.4% over the year. 

Gasoline prices, meanwhile, decreased 0.8% in January, though they were offset by a 9.5% monthly rise in fuel oil and a 4.2% monthly increase in electricity. The cost of gasoline is up 40% over the year.

US January 2022 Highlights

US February CPI +7.9% vs +7.9% expected

  • Highest since Feb 1982
  • Prior was 7.5%
  • m/m CPI +0.8% vs +0.8% expected
  • Prior m/m reading was +0.6%
  • Real weekly earnings -0.5% vs -0.5% prior

Core inflation:

  • Ex food and energy +6.4% vs +6.4% y/y expected
  • Most since August of 1982.
  • Prior ex food and energy +6.0%
  • Core m/m +0.5% vs +0.5% exp
  • Prior core m/m +0.6%
  • Energy remained the biggest contributor (25.6% vs 27% in January), with gasoline prices surging 38% (40% in January).
  • Inflation accelerated for shelter (4.7% vs 4.4%); food (7.9% vs 7%, the largest since July of 1981), namely food at home (8.6% vs 7.4%);
  • New vehicles (12.4% vs 12.2%); and used cars and trucks (41.2% vs 40.5%).
  • Excluding volatile energy and food categories, the CPI rose 6.4%, the most in 40 years.
US CPI Inflation – where it is

US CPI February 2022

CPI in January was up 0.6% month-over-month (consensus +0.4%) following a 0.9% increase in October

United States Consumer Price Index (CPI)

 

CPI in January year-over-year accelerated to 7.9%, the highest since February of 1982 at market forecasts of 7.9%,

United States Inflation Rate

Core Inflation y/y

United States Core Inflation Rate

Food

United States Food Inflation

Housing

United States CPI Housing

Transportation

United States CPI Transportation

US Core CPI November 2021

United States Core Consumer Prices

 

The effects of the coronavirus pandemic have been weighing on prices since in last year many businesses closed and lockdowns were imposed, denting economic activity.  A jump in commodities and material costs, coupled with supply constraints, are pushing producer prices up and some companies are passing those costs to clients

 

“I’m making more money…But I don’t see it because I’m paying more money for stuff now.” Low-wage workers are getting sharp raises. Inflation is eating them up. via Greg Ip WSJ

 Source: BLS

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