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Consumer Price Index Jumps Another 1.3 Percent, Much More Than Than Expected

The CPI rose 1.3 percent in June. Year-over-year prices rose 9.1 percent, a new four-decades high.
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CPI data from BLS, PCE data from BEA, chart by Mish

CPI data from BLS, PCE data from BEA, chart by Mish

Today the BLS released the Consumer Price Index for June and it was a a scorcher. Personal Consumption Expenditures (PCE) data is from the BEA and lags by a bit.

The CPI is a measure of expenses directly paid by consumers whereas PCE also includes items pain on behalf of consumers, notably health-care including Medicare. 

CPI-Year-Over-Year 

CPI data from BLS, chart by Mish

CPI data from BLS, chart by Mish

Year-Over-Year Details

  • The all items index increased 9.1 percent for the 12 months ending June, the largest 12-month increase since the period ending November 1981. 
  • The all items less food and energy index rose 5.9 percent over the last 12 months.
  • The energy index rose 41.6 percent over the last year, the largest 12-month increase since the period ending April 1980. 
  • The food index increased 10.4 percent for the 12-months ending June, the largest 12-month increase since the period ending February 1981.
  • The all items less food and energy index rose 5.9 percent over the last 12 months.

CPI Month-Over-Year 

CPI data from BLS, chart by Mish

CPI data from BLS, chart by Mish

Month-Over-Year Details

  • The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 percent in June on a seasonally adjusted basis after rising 1.0 percent in May.
  • The energy index rose 7.5 percent over the month and contributed nearly half of the all items increase, with the gasoline index rising 11.2 percent.
  • The food index rose 1.0 percent in June, as did the food at home index. 

I exclude energy from the above chart because it would blow the scale.

The BLS release stated "The energy index rose 7.5 percent over the month and contributed nearly half of the all items increase."

I calculated 64% and confirmed with the BLS just now at 63.8%. 

Energy 

  • The energy index increased 7.5 percent in June after rising 3.9 percent in May.
  • The gasoline index rose 11.2 percent in June after increasing 4.1 percent in May.
  • The index for natural gas rose 8.2 percent in June, the largest monthly increase since October 2005. 
  • The electricity index also increased in June, rising 1.7 percent. 
  • The energy index rose 41.6 percent over the past 12 months. 
  • The gasoline index increased 59.9 percent over the span, the largest 12-month increase in that index since March 1980. 
  • The index for electricity rose 13.7 percent, the largest 12-month increase since the period ending April 2006. 
  • The index for natural gas increased 38.4 percent over the last 12 months, the largest such increase since the period ending October 2005.  
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Bloomberg Economist Expectations

  • CPI M/M: 1.1% Expected vs 1.3% Reported
  • CPY Y/Y: 8.8% Expected vs New 40-Year High 9.1% Reported
  • CPI Excluding Food and Energy M/M: 0.5% Expected vs 0.7% Reported
  • CPI Excluding Food and Energy M/M: 5.8% Expected vs 5.9% Reported

It was another clean miss with economists undershooting inflation in every estimate.

Yellen Flashback - No Recession?!

Recession Outlook Update, Where Do Things Currently Stand?

Yellen sees no recession. I suggest we are in one right now. The question is how deep.

For discussion, please see Why I Expect a Minimal Rise in Unemployment This Recession

That's the good news. Now the bad.

Why Earnings and the Stock Market Will Get Crushed

Here's the case for an earnings smash accompanied by a continuation of the stock market crash: Artificial Wealth vs GDP: Why Earnings and the Stock Market Will Get Crushed

Housing also rates to get crushed. For discussion, please see Expect Huge Negative Revisions to New Home Sales as Sales Crash and Orders Cancelled

This post originated at MishTalk.Com.

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