Uh-oh. Consumer prices jumped more than expected in May, according to the Consumer Price Index…(BLS)
- Y-O-Y: The Consumer Price Index for All Urban Consumers increased 8.6% when compared to May 2021, this is up from 8.3% last month and is the highest level since December 1981.
- M-O-M: Prices were up 1.0% from April, up from the 0.3% reported in April.
NOTE: Economists had projected inflation to hold at 8.3% year-over-year and then month-over-month prices would increase by 0.7%.
Food prices continued their climb eclipsing double-digits in May at 10.1% thanks to a 1.1% monthly increase, this is up from the 9.4% reported in April…
- Meats, poultry, fish, & eggs held the top spot despite a 0.1% year-over-year decline to 14.2%. Looks can be deceiving though as prices were up 1.5% from April to May.
- Other food at home is now up 12.0% year-over-year followed by nonalcoholic beverages rising 12.0% when compared to May 2021.
NOTE: The divide between eating at home and eating out continues to climb with a now 4.5% spread between food at home (11.9%) & food away from home (7.4%).
After a somewhat muted April, energy prices jumped in May with overall energy costs rising 6.1% for the month and 34.6% year-over-year…
- Gas prices jumped 7.8% in May putting them up 49.1% year-over-year.
- Electricity costs were up 1.9% from April and are now up 12.0% when compared to one year ago.
Shelter costs continue to rise with a 0.6% increase from April, this up from the 0.5% increase from March, putting the annual rise at 5.5%…
- Rents and ownership equilivant were both up 0.6% for the month with the former up 5.2% year-over-year and the latter up 5.1%.
Used cars and trucks continue to hold the top spot with a 16.1% year-over-year price jump followed by new vehicles (+12.6%) and tobacco products (+7.9%).
At first look, this was not good. As time passed the analysis was even worse…
- Neil Irwin of Axios was pretty blunt with his analysis. “I keep looking at the line item breakdown of the CPI report searching for silver linings and I just don’t see any. This report is a disaster if you’re a Fed or Biden administration official hoping this inflation will go away without a serious downturn.”
(Twitter)
- Mohamed A. El-Erian, fromer CEO of PIMCO, was even less optimistic, “Every US #CPI #inflation measure came in higher than consensus expectations. Amplifying the economic/social/political discomfort, headline is a new high for this inflation cycle. Also, if the first 10 days of June are anything to go by, the next monthly measure would be higher.” (Twitter)