Inflation wasn’t hotter than expected but it was still hotter than anyone would like, according to the latest Consumer Price Index…(BLS)
- Y-O-Y: The Consumer Price Index for All Urban Consumers increased to 7.9% when compared to February 2021, this is up from 7.5% in January.
- M-O-M: The all items index increased 0.8% from January, this up 0.6% from January.
NOTE: Core CPI is now 6.4%.
Food prices continue to soar now equaling the overall rate of 7.9% thanks to a 1.0% jump just month-over-month…
- Meat, Poultry, fish, & eggs actually had the smallest gain month-over-month (0.9%) but year-over-year leads the way with price jumps of 13.3% followed by cereal & bakery products up 7.8%(+1.3%) and fruits & vegetables up 7.6% (1.9%).
- Food away from home saw the smallest monthly gain at 0.4% as is now up 6.8% year-over-year which is well under food at home’s increase of 8.6%
Energy prices spiked in February with a 2.7% jump from January but the year-over-year gain of 25.6% was actually lower than January’s (27.0%)…
- Gasoline jumped 5.4% which puts prices up 38.0% year-over-year, this is actually lower than January (40.0%).
- REMINDER: A 40% climb this year is even more concerning as gas prices began rising last year so these large price changes are based on rising prices, not the depressed prices we saw in 2020.
Used cars & trucks still lead the way in the commodities category with a 41.2% year-over-year increase thanks to a 0.8% jump from January…
- New vehicles continued to hold the number two spot with 12.4% year-over-year growth followed by tobacco products (+7.0%) and apparel (+6.6%).
Shelter costs are starting to rise at a much faster pace hitting 0.6% month-over-month, which was the fastest rate since January 2007, and increased 4.7% year-over-year…
- Rents were up 0.5% to 4.2% year-over-year.
- Ownership jumped 0.4% to 4.3% year-over-year
This is an all-around bad report. Food costs are skyrocketing and you have energy costs rising on already inflated prices. However, the shelter costs are the real concern. Shelter makes up about 1/3 of the CPI and with prices continuing to rise the floor inflation is quite high. Even if Russia backs off Ukraine and the fed is allowed to raise rates shelter costs are so elevated that inflation will remain so for probably the rest of the year.