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The CPI Much Hotter Than Expected Rises to New 40-Year High

Treasury Secretary Janet Yellen's yapping over the past few days set the tone for the CPI news today.
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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 April 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 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. T
  • 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.  

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 1.0 percent in May on a seasonally adjusted basis after rising 0.3 percent in April.
  • 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.  

Bloomberg Economist Expectations

  • CPI M/M: 0.7% Expected vs 1.0% Reported
  • CPY Y/Y: 8.2% Expected vs New 40-Year High 8.6% Reported 
  • CPI Excluding Food and Energy M/M: 0.5% Expected vs 0.6% Reported
  • CPI Excluding Food and Energy M/M: 5.9% Expected vs 6.0% Reported

It was a clean miss economists undershooting inflation in every estimate.

Yellen Set the Tone

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Yesterday, Treasury Secretary Janet Yellen set the tone for a hot report with a series of comments.

Yellen Hoping

Yellen on Jobs

No Recession?!

Yellen on Oil 

"Eventually, Yellen was bound to say something that actually made sense."

For more amusing comments by Janet Yellen, please see Let's Tune Into Janet Yellen Quotes of the Day and Responses to Them

Recession Outlook Update, Where Do Things Currently Stand?

Yellen sees no recession. I suggest we might be in one right now.

For discussion, please see Recession Outlook Update, Where Do Things Currently Stand?

This post originated at MishTalk.Com.

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