The White House press secretary, Jen Paski, warned us on Monday that the “…March CPI headline inflation to be extraordinarily elevated” and she was not wrong. Keeping with the trend in 2022 the inflation rate in March came in hotter than expected, according to the latest Consumer Price Index…(BLS)
- Y-O-Y: The Consumer Price Index for All Urban Consumers increased to 8.5% in March, this is up from the 7.9% reported in February and is the highest level since December 1981.
- M-O-M: The all items index increased 1.2% from February which is the hottest monthly increase during the pandemic and up from the 0.8% reported in February
NOTE: Core CPI was up 0.1 percentage points to 6.5%.
Food prices have now surpassed the overall inflation rate at 8.8% with a 1.0% increase just from the prior month…
- Meat, poultry, fish, & eggs continue to see the biggest price gains with a 13.7% year-over-year jump in March thanks to a 1.3% monthly increase followed by cereal & bakery products up 9.4%(+1.8%) and fruits & vegetables 8.5%(+1.1%).
- Groceries hit double-digits in March up 10.0% year-over-year thanks to a 1.5% jump from February while food away from home was only up 0.3% from February for a 6.9% increase year-over-year.
Energy prices, after a slight drop in February, continued their climb with an 11.4% monthly jump to put year-over-year inflation at 32.0%…
- Gasoline prices were up 19.8% for the month and 48.0% for the year in March.
- Electricity prices were up 1.7% for the month and were up 11.1% year-over-year.
Used cars & trucks saw a significant 3.8% monthly drop in prices, but are still leading the way year-over-year with prices up 35.3% in March…
- New vehicles are still holding on to the number two spot with an increase of 12.5% year-over-year followed by tobacco products (+6.9%) and apparel (+6.8%).
Shelter costs maintained their record pace seen in February with a 0.6% monthly jump in prices for a yearly increase of 5.0%…
- Rents and ownership equivalent both were up 0.4% for the month with the former up 4.4% year-over-year and the latter up 4.5%.
As bad as last month’s report was this report was even worse. This is as bad as it gets for consumers with energy and food costs up double-digits. Shelter costs are maintaining their record pace which will squeeze consumers even more. The March jobs report had wage growth at 5.5% which is only 65% of the inflation rate. So even with wage growth consumers can not keep up with inflation. It will be interesting to see what happens with retail spending later this month as more and more of consumers’ income is being siphoned off for necessities…