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CPI Rips Higher to 8.5 Percent From a Year Ago, the Most Since 1981

Consumer prices jumped another 1.2 percent in March. The CPI is up 8.5 percent from a year ago, the most in over four decades.
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Consumer Price Index data from BLS chart by Mish

Consumer Price Index data from BLS chart by Mish

Year-Over-Year CPI Details

  • The all items index continued to accelerate, rising 8.5 percent for the 12 months ending March, the largest 12-month increase since the period ending December 1981. 
  • The all items less food and energy index rose 6.5 percent, the largest 12-month change since the period ending August 1982. 
  • The energy index rose 32.0 percent over the last year
  • The food index increased 8.8 percent, the largest 12-month increase since the period ending May 1981.
  • Rent increased 4.4% and Owners' Equivalent Rent OER rose 4.5%

OER is the mythical price one would pay to rent one's own house from oneself, unfurnished and without utilities.

OER is the single largest component in the CP with a weight of 24.04%. Rent has a weight of 7.34%. Given that both are continually understated vs other measures of rent, the CPI is up more than stated.

I do not chart energy prices because at 32.0%. it skews the scale of everything else.

CPI Month-Over-Month 

Consumer Price Index data from BLS chart by Mish

Consumer Price Index data from BLS chart by Mish

Month-Over-Month Details

  • The gasoline index rose 18.3 percent in March and accounted for over half of the all items monthly increase; other energy component indexes also increased. 
  • The food index rose 1.0 percent and the food at home index rose 1.5 percent. 
  • The index for all items less food and energy rose 0.3 percent in March following a 0.5-percent increase the prior month. 
  • A broad set of other indexes also contributed to to the increase, including those for airline fares, household furnishings and operations, medical care, and motor vehicle insurance. 

Four Measures of Inflation

PCE and CPI data from BLS and BEA

PCE and CPI data from BLS and BEA

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PCE stands for Personal Consumption Expenditures. That data is from the BEA and lags the CPI reporting by a number of weeks. 

Data Dependent Fed

The allegedly "data dependent" Fed ignored raging inflation for well over a year, even by their own pathetic measures that ignore housing and stock market bubbles.

Hello Fed, Inflation Expectations Are Unglued, No Longer Well Anchored

Given the Fed is a firm believer in inflation expectations let's check in on a New York Fed survey of consumer expectations. 

For details and discussion, please see Hello Fed, Inflation Expectations Are Unglued, No Longer Well Anchored

This post originated on MishTalk.Com.

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