US CPI in April rose +0.3% m/m (consensus 0.2%). Core CPI rose 0.6% (consensus +0.4%). The bond and stock markets have been selling off on inflation fears. 10-year yields rising over 3%. On a year-over-year basis, total CPI is up 8.3% (versus 8.1% expected) and core CPI is up 6.2% (versus 6.0% Expected). The surge in energy and grains costs due to war in Ukraine has inflamed price pressures. The Fed began moving aggressively last month.
April marked the eighth time in the past 12 months that the core CPI rose at least 0.3% over the month before.
Increases in the cost of food, electricity and shelter were the largest contributors again to the monthly rise, the Labor Department said
Many analysts had expected March to mark the inflation peak although the war in Ukraine is far from over, supply chain bottlenecks persist, and consumer demand remains elevated which is likely to weigh on the CPI.
Despite the slowdown in April which suggests that inflation has probably peaked, the inflation is unlikely to fall to pre-pandemic levels any time soon and will remain above the Fed’s 2% target for a long time as supply disruptions persist and energy and food prices remain elevated.
US April 2022 Highlights
CPI
- US CPI (M/M) Apr: 0.3% (est 0.2%; prev 1.2%)
- US CPI (Y/Y) Apr: 8.3% (est 8.1%; prev 8.5%)
Real Earnings
- US Real Average Hourly Earnings (Y/Y) Apr: -2.6% (prev 2.7%; prevR -2.6%)
- US Real Average Weekly Earnings (Y/Y) Apr: -3.4% (prev -3.6%; prevR -3.5%)
Core inflation:
- US CPI Ex Food And Energy (M/M) Apr: 0.6% (est 0.4%; prev 0.3%)
- US CPI Ex Food And Energy (Y/Y) Apr: 6.2% (est 6.0%; prev 6.5%)
- Energy prices increased 30.3%, below 32% in March namely gasoline (43.6% vs 48%) while fuel oil increased more (80.5% vs 70.1%).
- Food prices jumped 9.4%, the most since April 1981
- Prices rose faster for shelter (5.1% vs 5%)
- New vehicles rose (13.2% vs 12.5%).
- The index for gasoline fell 6.1%, offsetting increases in the indexes for natural gas (3.1%) and electricity (0.7%).
US CPI April 2022
Core Inflation y/y
Food
Housing
Transportation
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
Source: BLS
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