Everyone was expecting a big jump, but based on the reaction, I don’t think anyone was thinking this big. (BLS)
- ALL ITEM INDEX: The all items index jumped 4.2% year-over-year and was up 0.8% month-over-month. This was the largest 12-month increase since September 2008.
- CORE CPI: Rose 0.9% month-over-month which was the largest increase since April 1982.
THE NEW HEDGE: The joke on social media was used cars are the new inflation hedge. Used cars/trucks saw a 10% month-over-month increase. This was the largest 1-month increase since the series began in 1953.
Energy prices after months of gains were actually down for the month.
- Gasoline was down 1.4% for the month, but was still up 49.6% for the year
- Overall, energy prices were down 0.1% for the month, but were up 25.1% for the year
Other notable climbs for the month were the aforementioned used cars (10%) followed by transportation services (+2.9%), medical care commodities (0.6%), new vehicles (0.5%) and food & shelter (0.4%)
THE BIG QUESTION: Is this permanent or is this transitory?
- The Fed is convinced it is transitory. “Fed Vice Chairman Richard Clarida expressed surprise at the pace of the increase. But he reiterated that he expected the price jump to be temporary, and for inflation to ‘return to—or perhaps run somewhat above—our 2% longer-run goal in 2022 and 2023,'” (Barrons)
- Others aren’t so certain. James Mackintosh at Wall Street Journal argues that everything is screaming inflation and “Investors are woefully unprepared for what may be a once-in-a-generation shift in the market.” (Wall Street Journal)