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.
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
- 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 February 2022
CPI in January was up 0.6% month-over-month (consensus +0.4%) following a 0.9% increase in October
CPI in January year-over-year accelerated to 7.9%, the highest since February of 1982 at market forecasts of 7.9%,
Core Inflation y/y
US Core CPI November 2021
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
From the Traders Community News Desk