Tag Archive for: cpi

Inflation Refuses To Go Away As Prices Stay High

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Inflation refused to significantly ease despite the Federal Reserve’s efforts to rein in high prices, according to the latest Bureau of Labor Statistics (BLS) inflation report released on Wednesday.

The Consumer Price Index (CPI), a broad measure of the prices of everyday goods such as energy and food, increased 4.9% on an annual basis in April compared to 5% in March, according to the BLS. Core CPI — which excludes energy and food — remained high, rising 5.5% year-over-year in April, compared to 5.6% in March.

The increase was driven primarily by a rise in shelter costs, which jumped 0.4% in April compared to 0.6% in March, according to the BLS. Inflation grew 0.4% on a monthly basis in April, compared to 0.1% in March, according to the BLS.

The index for used cars and trucks increased 4.4% and the index for motor vehicle insurance rose 1.4%, according to the BLS. The indices for recreation, household furnishings and operations and personal care also increased.

The energy index decreased 5.1% over the 12 months ending in April while the food index increased 7.7% for the last year.

Inflation reached 9.1% in June 2022, its highest point since 1982, according to the BLS.

“The direction of inflation is getting less bad, but pace of improvement is still frustratingly slow,” Bill Adams, chief economist for Comerica Bank told Morningstar.

“Inflation has stayed higher for longer than the conventional forecasting techniques would lead us to believe, and so the risk is that the persistence of inflation continues,” he said. “That’s another way of saying that once inflation has picked up, it’s hard to slow down again. And that’s where we are now.”

The CPI report follows an unexpectedly hot jobs report on Friday as the U.S. added 253,000 jobs in April, and the unemployment rate dropped slightly to 3.4%, according to BLS data.

“We remain committed to bringing inflation back down to our 2% goal and to keep our longer-term inflation expectations well-anchored,” Federal Reserve Chair Jerome Powell, who has raised interest rates ten consecutive times in an attempt to lower inflation, said Wednesday in a press conference following the Federal Open Market Committee (FOMC) meeting. “Reducing inflation is likely to require a period of below-trend growth and some softening of labor market conditions.”

AUTHOR

JASON COHEN

Contributor.

RELATED ARTICLE: Core Inflation Still Sky High, New Report Shows

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Inflation Stays Sky-High As Core Prices Soar Above Expectations

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UPDATE: Biden “Our economy is strong as hell.”

Inflation increased 0.4% in September from August as “core” inflation, measuring the price of goods excluding food and energy, soared above expectations to a 40-year-high, according to the Bureau of Labor Statistics (BLS).

Core inflation rose 6.6% year-over-year and 0.6% month-to-month in September, beating year-over-year expectations by 0.1%, while the Consumer Price Index (CPI) fell 8.2% overall year-over-year despite spiking 0.4% from August, the BLS announced Thursday. Economists had predicted CPI would fall 8.1% year-on-year in September, down from 8.3% in August.

The decline in overall inflation can be attributed largely to a decline in energy costs, although they remain elevated by 19.8% year-on-year compared to 23.8% in August, according to the BLS. Food costs remain historically high, with the overall food index falling slightly to 11.2% annually, down from 11.4% in August.

With both headline and core inflation still well above the Federal Reserve’s target of 2%, the Federal Reserve is unlikely to halt its aggressive campaign of interest rate hikes, CNBC reported Wednesday. Goldman Sachs warned investors late September that even in the event of a so-called “soft landing,” where the Federal Reserve tames inflation without inducing a recession or a significant increase in unemployment, the Fed is likely to continue aggressive rate hikes through the end of the year, raising rates from the current baseline of 3.25% up to 4.5%.

The U.S. added 263,000 jobs in September, the slowest rate of the year, as the labor market continued to cool. Bank of America’s chief U.S. economist Michael Gapen warned Monday that unemployment could spike if the Fed continues its rate hikes, pushing unemployment as high as 5.5% from its current level at 3.5%, costing the U.S. 175,000 jobs per month early next year.

“No doubt the Fed still has its work cut out for them, and if tomorrow’s CPI read is hot, don’t be surprised to see some investors come to grips with how long the road to tamer inflation may be,” Mike Loewengart, head of portfolio management at Morgan Stanley told CNBC.

AUTHOR

JOHN HUGH DEMASTRI

Contributor.

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Inflation Hits Yet Another Record High As Americans Feel The Squeeze

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Inflation climbed 9.1% over the past 12 months, the highest year-over-year percentage increase since December 1981, the Department of Labor (DOL) announced Wednesday.

The Consumer Price Index (CPI) increased 1.3% between May and June, according to the DOL report released Wednesday. Economists had predicted that CPI would increase by 1.1% last month and 8.8% over the 12-month period ending in June.

“The energy index rose 7.5 percent over the month and contributed nearly half of the all items increase, with the gasoline index rising 11.2 percent and the other major component indexes also rising,” the DOL said in their report. “The food index rose 1.0 percent in June, as did the food at home index.”

The White House preemptively downplayed the inflation data, saying the metric was already outdated as prices have begun to supposedly decrease.

“June CPI data is already out of date because energy prices have come down substantially this month and are expected to fall further,” White House Press Secretary Karine Jean-Pierre said on Tuesday.

“I don’t think that number peaks until September and I think at that point it will be in double digits,” E.J. Antoni, research fellow for Regional Economics at The Heritage Foundation told the Daily Caller News Foundation.

Wednesday’s report follows a steady stream of negative polling for President Joe Biden, including one New York Times survey that found a majority of Democrats would prefer the 79-year-old not run in 2024. Voters have cited the economy and inflation as major issues ahead of the midterms.

The gasoline index rose 11.2%, while the food at home index increased 10.4%,  year over year, BLS reported. Almost all aspects of American purchases increased in June, including shelter, airline fares, new and used cars and trucks, medical care, household furnishings and operations, recreation and clothing, according to BLS.

CPI surpassed the Federal Reserve’s 2% target in May 2021 and has continuously climbed higher and higher since, according to federal data.

AUTHOR

MAX KEATING

Contributor.

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