Search
All
Economics
Politics

The Fed’s Preferred Inflation Measure Reaches Fastest Pace Since 1983

•

•

8 comments on The Fed’s Preferred Inflation Measure Reaches Fastest Pace Since 1983

•

Four Measures of Inflation, data from St. Louis Fed, chart by Mish

The Bureau of Economic Analysis (BEA) released Personal Income and Outlays data for January of 2022 today. 

The spotlight on this post is Personal Consumption Expenditures (PCE) price data.

PCE differs from the CPI (Consumer Price Index) in that it includes expenses paid on behalf of consumers such as Medicare and company medical plans whereas the CPI only included expenses directly paid by consumers.

Neither index directly includes housing prices.

The “core” measures exclude food and energy.

PCE Details for January 2022    

  • The PCE price index for January increased 6.1 percent from one year ago
  • Energy prices increased 25.9 percent
  • Food prices increased 6.7 percent. 
  • Excluding food and energy, the PCE price index for January increased 5.2 percent from one year ago.
  • PCE rose 0.6 percent from December.
  • Core PCE rose 0.5 percent from December.

Chart Since 1971 

Four Measures of Inflation, data from St. Louis Fed, chart by Mish

This was yet another hot report, and things are actually worse than the BEA and BLS present because home prices are neither in the CPI nor the PCE. 

Housing Prices

Case-Shiller home price index data via St. Louis Fed, chart by Mish.

CPI vs Case-Shiller Adjusted CPI

Case-Shiller home price index data via St. Louis Fed, chart by Mish.

Case-Shiller home price data is as of December. At that time the CPI was up 7.04% for the year, it’s now up 7.5% for the year as of January.

Factoring in home prices the CPI is up 9.88% in the last 12 months. 

For discussion, please see Home-Price Growth Accelerates, 2021 Annual Surge Is the Most on Record

CPI Up Most in 40 Years

For more on the CPI, please see CPI Jumps Most Since February 1982, Up at Least 0.5% 9 Out of Eleven Months

Alleged “Benefits of Running the Economy Hot”

Meanwhile, Charles Evans, president and chief executive officer of the Chicago Fed wants to run the economy hot.

For discussion, please see Chicago Fed President Praises the “Benefits of Running the Economy Hot”

This post originated on MishTalk.Com.

Thanks for Tuning In!

Please Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

If you have subscribed and do not get email alerts, please check your spam folder.

Mish

Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

This post originated on MishTalk.Com

Thanks for Tuning In!

Mish

Mike Shedlock

Recommended Articles

Comments to this post are now closed.

8 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
Billy
Billy
4 years ago
Hey Mish,
Is it possible to do a story that measures most types of investments over a 30-50 year chart where each one is divided by Billions of USD in M2 currency?
It could have precious metals, all of the major indexes, median and average national rents, commercial and residential property, commodities, ect. Maybe even include basic cars, gallon of organic milk, Big Mac, utilities, ect.
I think it would expose bubbles and undervalued items as well.
I don’t have the tools to create it myself and I think it could make a good story.
0
0
Mish
Mish
4 years ago
Reply to  Billy
Extremely difficult at best, perhaps impossible. Some items – cars and milk – are consumed. Mortgages are refinanced or paid down. But even houses need upkeep. And guess what happens to a house not maintained – it rots away. What about property taxes? Indexes skewed by earnings which is why we have smoothed PE ratios and the Buffet indicator.
Gold might be the only doable idea. There are reasonable estimates of gold mining and all the gold ever mined is still in existence.  I have posted the price of gold vs M2 – But its not very related.
0
0
Mish
Mish
4 years ago
The Latest and Greatest Inflation Measurement Idea
0
0
Scooot
Scooot
4 years ago
Inflation is a big issue here too. My daughter received an email today with new energy prices.
Electricity: day unit rising from 23.284p to 32.985p per kWh, night rate from 13.779p to 19.520p per kWh, standing charge from 24.09p to 38.004p per kWh. 
Gas: 4.055p to 7.344p per kWh, standing charge 26.112p to 27.219p per day.
0
0
Scooot
Scooot
4 years ago
Reply to  Scooot
“standing charge from 24.09p to 38.004p per kWh.” Should say per day.
0
0
Casual_Observer2020
Casual_Observer2020
4 years ago
Reply to  Scooot
Glad I live somewhere that doesn’t require much heat or air conditioning or energy in general. I think many Americans will be retiring in Panama or Ecuador the way the dollar is going. 
0
0
Bam_Man
Bam_Man
4 years ago
What remains of the US middle class is in the process of being eviscerated by the Fed’s criminal malfeasance.
If anyone would have told you in 1983 that the next time inflation would be this high interest rates would be at ZERO, they would have told you that you are crazy.
0
0
StukiMoi
StukiMoi
4 years ago
Reply to  Bam_Man
“What remains of the US middle class is in the process of being eviscerated by the Fed’s criminal malfeasance.”
Yet the saps being robbed blind into destitution, are so pliantly indoctrinated into illiteracy, that they are easily led by the nose, to instead fume about scary Chinese child laborers climbing our climate fence, or something similarly idiotic.
0
0

Decorate Your Walls with Mish Fine Art Images

Click each image to view details or purchase in the store.

Stay Informed

Subscribe to MishTalk

You will receive all messages from this feed and they will be delivered by email.