Consumer prices rise more than expected, pushed by 9.1% jump in gasoline

[CountAllVotes]

Source: CNBC

Consumer prices shot higher in March, given a boost by a strong economic recovery and year-over-year comparisons to a time when the Covid-19 pandemic was about to throttle the U.S. economy, the Labor Department reported Tuesday.

The consumer price index rose 0.6% from the previous month but 2.6% from the same period a year ago. The year-over-year gain is the highest since August 2018 and was well above the 1.7% recorded in February.

The index was projected to rise 0.5% on a monthly basis and 2.5% from March 2020, according to Dow Jones estimates.

The report “is the clearest indication so far that the signs of mounting inflation evident in business surveys and producer prices are feeding through to stronger consumer prices,” wrote Michael Pearce, senior U.S. economist at Capital Economics. “For all the focus on supply disruptions pushing goods prices higher, the strongest upward pressure on prices is coming from the services sector.”

Read more: https://www.cnbc.com/2021/04/13/us-consumer-price-index-march-2021.html

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Inflation is here for now.

What we'll see over the next few months will be interesting!

[MosheFeingold]

1. Happens when you print money

Ask the Germans of 1932.

[speak easy]

5. Bunk. It's the price of crude oil.

A surge in gasoline prices accounted for about half the gain

[MosheFeingold]

7. The price of oil

Is denominated in US dollars.

You print more dollars, the price of oil rises, even if the relative price stays constant.

It happens to all commodities; none other are as noticeable as gasoline.

[LT Barclay]

9. I believe it is because the extraction industries are not

happy with the results of the election and are trying to trash hopes of an economic recovery.

[MosheFeingold]

10. How could they do that?

Are they cutting back supply to increase price?

[LT Barclay]

13. Just bumping the price charged to the retailer

Not the first time there has been industry wide price fixing like Eenron with electricity.

[peppertree]

12. +1

Take the 1979 Memorial weekend gas lines - the event, more than any other, that deep-sixed Carter's re-election chances.

People often forget that it originated in a shutdown of Amerada Hess' massive Virgin Islands refinery - the largest outside the Soviet Union at the time.

The shutdown - which lasted over two weeks in May 1979 - was unscheduled and total, creating a domino effect that led to distributor hoarding and thus the gas lines.

Not coincidentally, George H.W. Bush threw his hat in the ring that week - and he had close ties to Hess.

Carter ordered an investigation into the Hess shutdown - but it was quietly dropped when Reagan took office.

[speak easy]

14. Snake Oil

The USD has been steady or rising against world currencies December onwards.

Friedman economists love to lie about oil prices. 1970's - forget OPEC - it's the money supply!

The funny thing is, they only really become concerned about inflation when a Democrat is in the White House.

They were talking the same shite during the Obama Administration - the Fed is printing money hand over fist, here come the Weimar wheelbarrows!

Trump tax cuts? silence.

[bucolic_frolic]

2. Retailers are seizing the opportunity to raise prices

Many things at Walmart up a few pennies, 8 cents, but it all adds up. Clothing will be a shocker.

Energy? That's how the 1970s inflation began, then rolled because it's a component of everything, but that inflation was largely imported and reflected a currency devaluation here and abroad.

Where we are seeing inflation is in housing prices and materials.

Wages too will spike, from minimum wage hikes, from the economy surging. That's a component of everything too.

I watch economist videos each week that say it's overblown, thank you "The Bond King", but I think we are in for it. 4-5% by the end of the year would not surprise me.

[Marthe48]

3. except for gasoline

I have been surprised that prices haven't gone up on other items. I eat chicken and the price of that has been steady in my local stores. I saw that cheese and some other dairy products went up a little on the price per pack, not surprising when one of the initial acts a year ago was dumping milk and selling off dairy herds. I think some fresh produce is higher, like strawberries.

Gasoline locally has gone down about .10/gal. in the last week.

After the refinery shutdown in Tx because of the power outage, I expected gas to go up, especially on top of the seasonal changeover which always seems to take refineries by complete surprise.

I am hunching my shoulders waiting for fallout from the Suez Canal shutdown.

[3825-87867]

4. Maybe

I think it's because big business is scared shitless over the possibility that the Biden Administration, possibly with Sanders and Warren being able to enact constraints on their profit making, are trying to get as much as possible now so they don't lose their exorbitant profits when and if those regulations take place.

Same thing happened in the 70s starting with the contrived coffee shortage, sugar shortage, gas shortage and others where we were all told the Business Bedtime Story that "as soon as the supply increases, we will reduce prices." And dumb America believed that.

Then when Carter became President and had to deal with Republican/Business inflation, which really started under Nixon and Ford, became rampant, he got blamed for the austerity he implemented (which took a few years and actually worked) through the end of the 70s. And of course, St. Ronnie used that pre-made inflation to BS the Stupid American Public (SAPs) and took credit for turning the economy around. An economy of the 80s that couldn't be sustained with the gross tax cuts to business Ronnie got passed.

Printing paper money is one thing. But when business conspires to increase prices just to increase profits at the expense of the economy, that's another. And we will let them do it again - because! Are we really that stupid? Of course we are!

[Bayard]

6. Anticipating the rise in corporate taxes contained in the infrastructure bill

Preparing to pass that adjustment on to the consumer.

[Politicub]

16. There is nothing to pass along. Goods are priced at the highest amount the

consumer is willing to pay. A tax increase on corporations will not change this.

We did not see price reductions after the corporate tax cut. Instead, companies used the windfall to buy back stock and line the pockets of executives.

[inwiththenew]

8. There is going to be a noticeable jump in the coming months

The White House is warning of it, although they say it will be temporary. The next shoe to drop is going to be shortages driving up the cost of everything. There have been significant shortages and increases in material cost for just about everything we produce here. That is going to be reflected in prices shortly.

https://www.whitehouse.gov/briefing-room/blog/2021/04/12/pandemic-prices-assessing-inflation-in-the-months-and-years-ahead/

[CaptainTruth]

11. The Texas freeze had a significant effect on oil refining capacity.

In total 3.7 million barrels a day, or 20% of total U.S. refining capacity, was shut down as a result of the weather. That definitely sent gas prices up.


Gulf Coast refinery runs decreased by 2.4 million b/d (28%) to 6.3 million b/d, the largest weekly decline since the impact of Hurricane Harvey in September 2017. The refinery closures will likely continue to affect petroleum markets in the coming weeks, reducing refinery demand for crude oil and production of refined products such as motor gasoline and distillate fuel oil.

The Gulf Coast accounts for more than half of total U.S. refinery capacity, and Texas alone accounts for about 32% of total U.S. capacity. By the peak of the weather’s impact on February 17, several refineries had announced either substantial or complete shutdowns as a result of external power outages, constrained natural gas supplies, logistical disruptions, or damage to process units. In total, an estimated 3.7 million b/d, or 20% of total U.S. refining capacity, was shut in as a result of the weather, according to U.S. Department of Energy estimates. Most of the disruptions and shutdowns were among refiners in the Beaumont/Port Arthur, Houston, and Corpus Christi regions of Texas.

[link:https://www.eia.gov/todayinenergy/detail.php?id=46936|]

[IronLionZion]

15. As airlines and driving increases

the price of fuel will increase. Travel will increase through the summer. People are fed up with quarantine so there is tremendous demand for vacations.

[George II]

17. One of the first things Reagan did in calculating the inflation rate was remove oil prices....

....from the indexes, along with interest rates. That resulted in an immediate reduction in inflation.

I didn't realize oil was back in the calculation. I did notice today, though, that gas prices have actually gone down a bit at some stations, and stabilized at others. One of the factors a couple of weeks ago was the Suez Canal being clogged for 7-8 days.

[progree]

19. Energy and food prices are in the headline CPI number, but not in the "Core" CPI. Has been that

way for decades.

https://www.bls.gov/news.release/cpi.nr0.htm

[cinematicdiversions]

18. I have a question. Why is housing not large part of the equation?

I certainly spend more on housing than the current "Basket of Goods" and I am pretty sure housing costs have risen more than 3% this year.

[progree]

21. It's included in "shelter"

https://www.bls.gov/news.release/cpi.nr0.htm

[progree]

20. CPI report from the source - Bureau of Labor Statistics

https://www.bls.gov/news.release/cpi.nr0.htm

It also lists the sub-categories and their price increases.

[DVRacer]

22. That's why last year's COLA for Social Security was so low

We got 1.3% during a pandemic with prices climbing on everything. So far Biden’s team is pushing for at least 3% for 2021 but realistically it should be 4.5% to makeup for what it should have been last year.