Inflation surges more than expected as CPI rises 8.6% in May

[mahatmakanejeeves]

Source: Yahoo! Finance

Yahoo Finance

Inflation surges more than expected as CPI rises 8.6% in May

Alexandra Semenova · Reporter
Fri, June 10, 2022, 8:31 AM · 1 min read

Inflation accelerated in May as U.S. consumers grapple with a surge in prices for gas, food, and shelter, data showed Friday.

The Bureau of Labor Statistics' May Consumer Price Index (CPI) reflected a year-over-year increase of 8.6% last month, up from April's print {sic}. Consensus economists were expecting an 8.3% increase in May, according to estimates compiled by Bloomberg.

On a monthly basis, the broadest measure of inflation rose at a pace of 1.0%, compared to 0.3% in April.

Ahead of Friday's report, experts predicted a surge in gasoline prices would prove a driver of inflation for May after a recent rise back to all-time highs. In April, a moderation in the price of energy offered a temporary relief to inflation after Russia's invasion of Ukraine rocked global commodities markets in March.

(This post is breaking. Please check back for updates.)


--

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

https://twitter.com/alexandraandnyc

Read more: https://finance.yahoo.com/news/may-inflation-data-june-10-2022-212834308.html

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The big number is on an annual basis, not for the month of May. This is more (worse) than expected.

Here's Alexandra Semenova's placeholder article from yesterday. She'll be updating this morning's article throughout the morning.

Yahoo Finance

May CPI preview: Inflation likely remained red-hot as gas prices surged

Alexandra Semenova · Reporter
Thu, June 9, 2022, 5:28 PM · 3 min read

U.S. consumer prices likely rose at the fastest rate in nearly 40 years in May, data is expected to show Friday. ... The Bureau of Labor Statistics' May Consumer Price Index (CPI) is expected to reflect a year-over-year increase of 8.3% last month, unchanged from April’s print {sic}, according to consensus estimates compiled by Bloomberg. On a monthly basis, economists forecast the broadest measure of inflation rose at an accelerated pace of 0.7%, compared to 0.3% in April.

https://finance.yahoo.com/news/inflation-consumer-price-index-cpi-usa-april-2022-123135066.html

Ahead of Friday’s report, experts predict a surge in gasoline prices will prove a driver of inflation for May after a recent rise back to all-time highs. In April, a moderation in the price of energy offered a temporary relief to inflation after Russia’s invasion of Ukraine rocked global commodities markets in March.

{snip}

Core CPI — which excludes the highly volatile food and energy sectors and is closely watched by policymakers — may be a bit of a bright spot in Friday’s report. ... Economists expect core inflation rose 5.9% year-over-year and 0.5% month-on-month, per Bloomberg data. These figures would mark a slight cooldown from increases of 6.5% and 0.6%, respectively, in April.

Beyond serving as a gauge of the costs everyday Americans shell out for groceries, gas, housing and other goods and services, May’s consumer price index comes just before the Federal Reserve is poised to further ramp up interest rates at its policy-setting meeting next week. ... Investors anticipate the Fed will raise its benchmark interest rate by 50 basis points, or 0.50%, on June 15; an increase of the same magnitude is expected in July. Persistent inflation readings may set the table for an increase of this magnitude in the fall as well.

{snip}

[mahatmakanejeeves]

1. From the source, the U.S. Bureau of Labor Statistics:

CPI for all items rises 1.0% in May; shelter, gasoline, food indexes rise

Economic News Release USDL-22-1113
CPI CPI Program Links
Consumer Price Index Summary
Transmission of material in this release is embargoed until 8:30 a.m. (ET) June 10, 2022

Technical information: [phone] * [e-mail] * www.bls.gov/cpi
Media Contact: [phone] * [e-mail]

CONSUMER PRICE INDEX - MAY 2022

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.0 percent in May on a seasonally adjusted basis after rising 0.3 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.6 percent before seasonal adjustment.

The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors. After declining in April, the energy index rose 3.9 percent over the month with the gasoline index rising 4.1 percent and the other major component indexes also increasing. The food index rose 1.2 percent in May as the food at home index increased 1.4 percent.

The index for all items less food and energy rose 0.6 percent in May, the same increase as in April. While almost all major components increased over the month, the largest contributors were the indexes for shelter, airline fares, used cars and trucks, and new vehicles. The indexes for medical care, household furnishings and operations, recreation, and apparel also increased in May.

The all items index increased 8.6 percent for the 12 months ending May, the largest 12-month increase since the period ending December 1981. The all items less food and energy index rose 6.0 percent over the last 12 months. The energy index rose 34.6 percent over the last year, the largest 12-month increase since the period ending September 2005. The food index increased 10.1 percent for the 12-months ending May, the first increase of 10 percent or more since the period ending March 1981.

{snip a table}

Food

The food index increased 1.2 percent in May following a 0.9-percent increase the prior month. The index for food at home rose 1.4 percent in May, the fifth consecutive increase of at least 1.0 percent. All six major grocery store food group indexes rose in May. The index for dairy and related products rose 2.9 percent, its largest monthly increase since July 2007. The index for nonalcoholic beverages increased 1.7 percent, and the index for other food at home rose 1.6 percent.

The cereals and bakery products index increased 1.5 percent in May after rising 1.1 percent in April. The index for meats, poultry, fish, and eggs rose 1.1 percent over the month, with the index for eggs rising 5.0 percent. The index for fruits and vegetables rose 0.6 percent in May after declining in April.

The food away from home index rose 0.7 percent in May after rising 0.6 percent in April. The index for full service meals rose 0.8 percent over the month. The index for limited service meals increased 0.7 percent in May after rising 0.3 percent in April.

The food at home index rose 11.9 percent over the last 12 months, the largest 12-month increase since the period ending April 1979. All six major grocery store food group indexes increased over the span, with five of the six rising more than 10 percent. The index for meats, poultry, fish, and eggs increased the most, rising 14.2 percent, with the index for eggs increasing 32.2 percent. The remaining groups saw increases ranging from 8.2 percent (fruits and vegetables) to 12.6 percent (other food at home).

The index for food away from home rose 7.4 percent over the last year, the largest 12-month change since the period ending November 1981. The index for full service meals rose 9.0 percent over the last 12 months, and the index for limited service meals rose 7.3 percent over the last year. The index for food at employee sites and schools fell 30.5 percent over the last 12 months, reflecting widespread free lunch programs.

Energy

The energy index increased 3.9 percent in May after falling 2.7 percent in April. The gasoline index rose 4.1 percent in May after declining in April. (Before seasonal adjustment, gasoline prices rose 7.8 percent in May.) The index for natural gas rose 8.0 percent in May, the largest monthly increase since October 2005. The electricity index also increased in May, rising 1.3 percent.

The energy index rose 34.6 percent over the past 12 months. The gasoline index increased 48.7 percent over the span. The index for fuel oil more than doubled, rising 106.7 percent; this represents the largest increase in the history of the series, which dates to 1935. The index for electricity rose 12.0 percent, the largest 12-month increase since the period ending August 2006. The index for natural gas increased 30.2 percent over the last 12 months, the largest such increase since the period ending July 2008.

All items less food and energy

The index for all items less food and energy rose 0.6 percent in May. The shelter index increased 0.6 percent in May, the largest monthly increase since March 2004. The rent index rose 0.6 percent over the month, the same increase as in April, and the owners' equivalent rent index also rose 0.6 percent. The index for lodging away from home rose 0.9 percent in May after larger increases in recent months.

The index for airline fares continued to rise, increasing 12.6 percent in May after rising 18.6 percent the prior month. The index for used cars and trucks rose 1.8 percent in May after declining in each of the 3 prior months. The index for new vehicles rose in May, increasing 1.0 percent after rising 1.1 percent in April.

The medical care index rose 0.4 percent in May. Medical care component indexes were mixed over the month. The index for hospital services increased 0.5 percent, while the indexes for physicians' services and for prescription drugs both declined 0.1 percent.

The index for household furnishings and operations continued to rise, increasing 0.4 percent over the month. The recreation index also rose 0.4 percent in May. Both increases were the same increases as in April. The index for apparel increased 0.7 percent in May after falling in April. Other indexes that increased in May include motor vehicle insurance (+0.5 percent), personal care (+0.4 percent), education (+0.3 percent), tobacco (+0.9 percent), and alcoholic beverages (+0.5 percent).

The index for all items less food and energy rose 6.0 percent over the past 12 months. The increase was broad-based, reflecting advances in almost all major component indexes. The shelter index rose 5.5 percent over the last year, the largest 12-month increase since the period ending February 1991. The index for household furnishings and operations increased 8.9 percent over the last 12 months. The index for new vehicles rose 12.6 percent and the index for used cars and trucks increased 16.1 percent over the year, while the index for airline fares rose 37.8 percent.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 8.6 percent over the last 12 months to an index level of 292.296 (1982-84=100). For the month, the index increased 1.1 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 9.3 percent over the last 12 months to an index level of 288.022 (1982-84=100). For the month, the index rose 1.2 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 8.0 percent over the last 12 months. For the month, the index increased 1.0 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.
_______________
The Consumer Price Index for June 2022 is scheduled to be released on Wednesday, July 13, 2022 at 8:30 a.m. (ET).

* * * * *

[center]Facilities for Sensory Impaired[/center]

Information from these releases will be made available to sensory impaired individuals upon request. Voice phone: [phone], Federal Relay Services: 1-800-877-8339.

-- -- -- -- -- --

[BumRushDaShow]

2. From WaPo breaking (Fed meets next week)

(they apparently had a placeholder article and updated after the embargo time)

Inflation at highest level in 40 years in May amid high gas prices


By Rachel Siegel and Aaron Gregg

June 10, 2022 at 5:02 a.m. EDT

(snip)

Much depends on whether the Federal Reserve manages to cool down the economy without acting so forcefully that it causes a recession. The Fed is on a path to raising interest rates seven times this year and will enact the third of those hikes coming next week. It is expected to raise rates by half a percentage point, similar to its May meeting, signaling aggressive moves are needed to keep inflation from becoming more persistent and entrenched in the economy.

There are some encouraging signs. Used-car prices — which made up a bulk of inflation for much of the past year — have fallen in recent months and are expected to continue dropping as semiconductor shortages improve. The red-hot housing market is also starting to cool, as a run-up in mortgage rates discourages aspiring buyers from competing for the few homes available.

(snip)

https://www.washingtonpost.com/business/2022/06/10/inflation-may-cpi-fed-gas-prices/

NYT just did their breaking as a "live update" - https://www.nytimes.com/2022/06/10/business/economy/inflation-soared-again-in-may-fresh-data-showed.html?smid=url-share

But they also included a graph that I thought was instructive for visualization over the decades -

[mahatmakanejeeves]

3. Thanks, and good morning. I've got another thread going up right now. NT

[peppertree]

14. Great visual as always - although Bush lied LIKE A RUG about inflation in his calamitous 2nd term

The real rate was well into double digits in 2005 and 2008.

[BumRushDaShow]

16. I remember when one of my sisters bought her 2nd house back in 2003

she was able to slide in with a mortgage that had bottomed out at around 5.25% before the rates started back up again. I remember a car note that was in the 8% range back in the late '80s.

I think we have gotten a bit "spoiled" with the low rates although what often hits the most are the credit cards rates that never go below the 25% "usury" rate despite all the so-called "0% introductory rate" offers (with tiny print stipulations ) that they all do.

[peppertree]

20. I hear you. The era of low inflation and rates seems to be over (hopefully, just for now).

Though I fear this could become a 8/9 year phenomenon, as it was from '73 to '82.

But in the short term, Big Business and the Banksters are well aware that their jacking up prices as they have - often unjustified, judging from bloated profit margins of late - is triggering rapid interest rate hikes.

A one/two punch that's becoming the surest guarantee of a fascist takeover in '24.

So a win/win, as far as a lot of them are concerned (with many exceptions).

[durablend]

4. And just what the media needed to knock the J6 hearing off the front page!

Expect Fox and the other RW media to harp on this relentlessly.

[mahatmakanejeeves]

5. From the BLS Twitter account:

CPI for all items rises 1.0% in May; shelter, gasoline, food indexes rise http://go.usa.gov/vr8 #CPI #BLSdata

Link to tweet

See our interactive graphics on today’s new Consumer Price Index data http://go.usa.gov/x9mMG #CPI #BLSdata #DataViz

Link to tweet

[oldsoftie]

6. Watch out, June will be even WORSE than May unless things change drastically

Summer is going to be rough & the nov elections aren't looking good either. Not going to change any of MY votes of course, but people vote their pocketbooks like it or not.
Too much money was pumped into the economy during covid and Putin saw an opportunity to push us over the edge with his stupid WAR.

[IronLionZion]

7. Fed is going to keep raising rates

it's going to be painful for some folks.

Meanwhile, oil companies have record high profits.

[progree]

8. A few more links

CPI: https://data.bls.gov/timeseries/CUSR0000SA0
. . . Monthly changes: https://data.bls.gov/timeseries/CUSR0000SA0?output_view=pct_1mth

The purchasing power of my annuity decreased 12.19% over the past 2 years. For every $100 in goods it could purchase 2 years ago, it can now purchase only $87.81 worth. What's more, unlike stocks, its purchasing power is unlikely to "bounce back" -- it would take an actual deflation for that to happen. Instead, it will just continue to erode.

CPI: in May 2020: 255.944, in May 2022: 291.474 (an increase of 13.88% over 2 years)
Indexing May 2020 to 100, then May 2022 is 113.88.

(Edit - several errors in the years corrected)

Monthly BLS CPI report: https://www.bls.gov/news.release/cpi.nr0.htm   (included in #1 above)

Food at home, BLS data series: https://data.bls.gov/timeseries/CUSR0000SAF11
. . . Monthly changes: https://data.bls.gov/timeseries/CUSR0000SAF11?output_view=pct_1mth

Real average hourly earnings for all employees decrease 0.6% in May (Mahatmakanejeeve's other post in LBN)
https://www.democraticunderground.com/10142928111
and down 3.0% over the past 12 months. ("Real" means inflation-adjusted)

[mahatmakanejeeves]

9. Thanks. I was expecting Marty Walsh to deliver a statement, but I haven't seen anything yet.

https://twitter.com/SecMartyWalsh

https://twitter.com/USDOL

[Permanut]

10. Figure should be revised..

to factor out gouging. I know, never gonna happen.

[progree]

11. Meat prices are expected to tumble soon

Ukraine says so many Russians were killed that the Russian army is storing dead soldiers in a meatpacking plant turned morgue, Businss Insider, 6/10/22

https://www.msn.com/en-us/news/world/ukraine-says-so-many-russians-were-killed-that-the-russian-army-is-storing-dead-soldiers-in-a-meatpacking-plant-turned-morgue/ar-AAYiedM

[OverBurn]

12. Unless this turns around before 2024, Dems are in trouble, regardless of not being their fault.

Seems my entire facebook feed is about how bad Biden is doing. That after ridding myself of the feeds from most all of the Trumpers several years ago.

The orange idiot could be back in charge and the USA and the world is doomed.

I'm sorry, yes I'm very pessimistic these days. Even after the great opening Jan 6 hearing. The orange asshate could be the first newly elected President, from a jail cell. Til he pardons himself.

[peppertree]

13. +1

The right-wing spin machine has been pushing non-stop for months, the idea of 'Biden as a modern-day Carter'.

Meanwhile, the real culprit - Big Business - is laughing all the way, with record profit margins. A win-win, the way they see it.

[The Mouth]

15. The party in power takes the heat. Period

If there was a Republican President and the GOP had both houses, we'd be beating the shit out of them over these exact same numbers.

[rockfordfile]

18. Republicans actually do cause this to happen.

[The Mouth]

22. Yes they do

and regardless of if the President is actually responsible, we beat the holy hell out of them with every bad economic statistic or story we can. Just the way it's always been done.

Just like a CEO- as Harry Truman put it 'The buck stops here. Part of leadership is taking responsibility and fixing something that is not your fault.

[dalton99a]

17. +1. "It's the economy, stupid"

[myohmy2]

19. not good...

...fix it or we lose...

...

[mahatmakanejeeves]

21. 'Catastrophically bad' inflation report is boosting chances of a 75-basis-point interest-rate hike

Market Extra

‘Catastrophically bad’ inflation report is boosting chances of a 75-basis-point interest-rate hike next week

Last Updated: June 10, 2022 at 1:30 p.m. ET
First Published: June 10, 2022 at 12:00 p.m. ET
By Vivien Lou Chen

Friday’s consumer-price index report for May — which showed the annual headline U.S. inflation rate climbing to 8.6% in May, with few signs of having peaked — is boosting the chances of a jumbo-sized rate increase by monetary-policy makers as soon as next week, and eliciting dire warnings that central bankers have completely lost control of prices.

Fed funds futures traders now see a 21% chance of a 75-basis-point hike in June, up from just 3.6% on Thursday, according to the CME FedWatch Tool. Economists at Barclays BARC, -3.69% and Jefferies backed up the shifting expectations, by indicating they expect policy makers to deliver a hike of that magnitude at their June 14-15 meeting.

Beneath the issue of where the Fed goes from here is a much more fundamental and serious problem: Some observers fear the U.S. central bank has already effectively lost control of inflation. May’s price gains were broad-based — hitting everything from shelter to gasoline and food, as well as the narrower gauge, the so-called core reading, that excludes food and energy. The data were “catastrophically bad” for both the Fed and Americans, said Nancy Tengler, chief executive and chief investment officer of Nashville-based Laffer Tengler Investments, which oversees $1.1 billion.

{snip}

Below is a roundup of the reaction to Friday’s CPI data:

{snip}