Consumer Price Index for February 2021
Economists are scouring the BLS CPI Report for February looking for signs of inflation.
Month-Over Month Details
- The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in February on a seasonally adjusted basis after rising 0.3 percent.
- The gasoline index continued to increase, rising 6.4 percent in February and accounting for over half of the seasonally adjusted increase in the all items index.
- The electricity and natural gas indexes also increased, and the energy index rose 3.9 percent over the month.
- The food index rose 0.2 percent in February, with the index for food at home and the index for food away from home both rising.
- The index for all items less food and energy rose 0.1 percent in February.
- The indexes for shelter, recreation, medical care, and motor vehicle insurance all increased over the month.
- The indexes for airline fares, used cars and trucks, and apparel all declined in February.
I put gasoline on the chart but it so distorted the scale that nothing else was readable.
CPI-Year-Over-Year
Year-Over-Year Details
- The all items index rose 1.7 percent up from 1.4 percent in January.
- The index for all items less food and energy rose 1.3 percent over the last 12 months.
- The food index rose 3.6 percent over the last 12 months.
- The energy index increased 2.4 percent over the last 12 months.
- Medical care services rose 3.0 percent over the last 12 months.
- The Shelter Index rose 1.5% over the last 12 months.
Pause in the Storm?
I think not. Nor do I think there is a much of a storm to begin with.
Before anyone of my readers scream, I am talking about inflation as measured not as really exists.
It’s easy to have “low inflation” when you don’t count housing and undercount the cost of medical care.
Motor fuel is only 3.76% of the CPI so it does not matter much.
Gold and Silver Pop as US Treasury Yields Drop
Today, treasury yields declined on the news of a tame CPI.
Yesterday, in advance of this report, I noted Gold and Silver Pop as US Treasury Yields Drop.
Looking for Inflation?
Inflation is easy to find. Look at housing. Look at asset bubbles in stocks and junk bonds.
I estimate inflation is up 3.5% from a year ago, just counting housing, not stock or junk bond bubbles.
If you are looking for inflation, the last place to look is where they tell you to look.
For discussion, please see Fed Hubris: Housing Prices Show the Fed is Making the Same Inflation Mistake.
Mish
now, that there is no inflation. here comes the conspiracy theories saying the govt is suppressing the true numbers.
You can see what -an- underlying inflation is by looking at average (not median) wages. Its also well recorded. Looking at 2000->2020 from the 25 year historical range here gives around 2.7% annual inflation.
So this -wage- inflation runs hotter than stated but not by so much. Unfortunately of course this doesn’t take into account the change in debt which as pointed out by so many isn’t considered. The issue is the excess debt. Not wage inflation or even broad inflation. The Biden stimulus is about the existing debt, or rather the attempt to break free/through the existing debt. imo.
If interest rates were raised to even 3% stocks and housing valuations would collapse, that hardly seems like runaway inflation to me. Interest rates could barely be lower! and inflation is really hardly moving the needle. Speculative bubbles aren’t inflation. I think also, that medical costs in the US aren’t inflation either, its just that costs have run away with themselves due to the unholy partnership of insurance companies and hospitals.
I think the problem is a deflationary spiral and that Biden/Yellen are following the debt jubilee idea loudly espoused by Steve Keen of Australia.
Average Wage inflation is probably a better measure than the cpi but is lower than it would otherwise be because of improvements in productivity caused by innovation etc.
I have posted the Moore Inflation Predictor before. This result was in line with their forecast. The next two months are when they predict a big change in the numbers, as those numbers will be a comparison to March-April last year, when oil prices plummeted, and other prices fell as well..
Time will tell if we see this bump or not.
I just did my own calcs – projected through May
Will post soon with an explanation
I have 3.4%
But this is mostly energy. If energy stalls that will be the worst of it. I don’t see higher numbers yet.
Look for the Fed to say “Transitory” a lot in the next few months
Sounds like you are in line with them for the next two months. Then, when we get comparisons to rising energy prices, I would expect to seem inflation head lower, rather than the continued increases that Moore shows. I expect that the media will focus on “core inflation, excluding food and energy”, as they usually do when there are big jumps in energy prices from a year earlier, also with complaints from pundits that “but I have to drive and eat!”
All my oil, gas, pipeline and utilities stocks are having a good time. & Tecks I didn’t get get rid of are dragging me down. Big time inflation is here especially if your building anything. Wife keeps going round the hardware store Raising the prices she just raised last week. The FEDs free money keeps chasing prices UP. Are they doing it on purpose or they don’t know what’s happening??
No matter how you define inflation, it is clear that money supply and asset prices are soaring. It only seems logical that Treasury bond buyers would demand higher interest rates, so rates are likely to go up. Why in the world would interest rates stay low with the largest amount of printing the US have ever done?
we simply haven’t had inflation as defined by the CPI in ages and not likely to. the index has been designed to filter out and ignore price increases
My daughter bought her first house in South Austin in 2016…..for just under $196K.
Zillow says it’s worth $329,286 today. By my back-of-the-napkin math, that’s roughly a 16.6% per year increase over the last five years.
But thank goodness we have no appreciable inflation.
Some small part of that is real gain and not from inflation, of course……maybe 25%.
If you live in a suburb of a city that experienced mostly peaceful protests, housing costs have gone up far more than 3.5%.