Inflation sets fresh 40-year high: February CPI rises 7.9% over last year

[mahatmakanejeeves]

Last edited Thu Mar 10, 2022, 10:08 AM - Edit history (1)

Source: Yahoo! Finance

Yahoo Finance

Inflation sets fresh 40-year high: February CPI rises 7.9% over last year

Emily McCormick · Reporter
Thu, March 10, 2022, 8:30 AM · 3 min read

U.S. consumers paid more for a variety of goods and services in February compared to the prior month and year, with prices climbing across the economy amid lingering supply and demand imbalances.

The Bureau of Labor Statistics' Consumer Price Index (CPI) rose 7.9% in February compared to last year, marking the fastest annual jump since 1982. This took out January's previous 40-year high rate of 7.5%, and matched consensus economist expectations, according to Bloomberg data. ... On a month-over-month basis, consumer price increases also accelerated. The CPI rose 0.8% in February compared to January after increasing by 0.6% during the prior month.

A surge in energy prices was one of the key contributors to the latest red-hot CPI print. Even before Russia invaded Ukraine and raised concerns over global energy disruptions, oil and gas prices were on the rise, as demand for fuel oil and other energy products outstripped tight global supplies. In February, the energy index jumped 3.5% for the largest monthly rise since October. And over last year, the energy index was up 25.6%.

A further impact from the Russia-Ukraine crisis and extended jump in energy prices that has ensued will likely show up in the CPI data in March, given the invasion first began in late February. Since then, gas prices at the pump have jumped to record levels, and crude oil prices have climbed to 14-year highs and at least briefly topped $130 per barrel.

{snip}

Read more: https://finance.yahoo.com/news/consumer-price-index-cpi-inflation-february-2022-203614415.html

---

Hat tip, progree, for pointing out that EMcC has been updating the article post-publication. I don't know how much lead time reporters get from the time they get the news to the time the embargo is released.

Yesterday's article about today's numbers:

CPI preview: Consumer prices likely set fresh 40-year high

https://www.democraticunderground.com/111692779

-- -- -- -- -- --

Yahoo Finance

February CPI preview: Consumer prices likely set fresh 40-year high

https://finance.yahoo.com/news/consumer-price-index-cpi-inflation-february-2022-203614415.html

Emily McCormick · Reporter
Wed, March 9, 2022, 3:36 PM ·3 min read

U.S. consumers likely paid more for a variety of goods and services in February compared to the prior month and year, with prices climbing across the economy amid lingering supply and demand imbalances.

The Bureau of Labor Statistics is set to release its February Consumer Price Index (CPI) Thursday at 8:30 a.m. ET, providing an update on the extent of inflationary pressures directly hitting consumers' wallets. Consensus economists polled by Bloomberg are looking for the CPI to jump by 7.8% in February compared to last year, which would mark the fastest annual jump since 1982. It would also take out January's current 40-year high rate of 7.5%. ... On a month-over-month basis, consumer price increases likely also accelerated. Economists are looking for the CPI to rise 0.8% in February compared to January, after increasing by 0.6% during the prior month.

A surge in energy prices is set to be one of the key contributors to another red-hot CPI print. Even before Russia invaded Ukraine and raised concerns over global energy supply disruptions, oil and gas prices were on the rise, as demand for fuel oil and other energy products outstripped tight global supplies. In January, the energy index was already up by 27% compared to the same month in 2021.

A further impact from the Russia-Ukraine crisis and extended jump in energy prices that has ensued will likely show up in the CPI data in March, given the invasion first began in late February. Since then, gas prices at the pump have jumped to record levels, and crude oil prices have climbed to 14-year highs and at least briefly topped $130 per barrel. And Russia's isolation from other global economies has also driven volatility across agricultural commodities including wheat -- for which Russia is the world's largest exporter -- and added the specter of a further jump in food prices.

{snip}

[Johnny2X2X]

1. This needs to ease soon

I realize that there is real inflation, and some of this is a result of flat prices because of the pandemic as a comparison point, but this must be brought under control soon or it's going to be a blood bath in November.

But Americans have short memories, if this number eases by the end of Summer, people will forget about it at the polling stations in November.

[Stuart G]

2. In the last few days in March, gasoline has gone up 35 to 40%

Next month will be much worse. Food is going up some. In my opinion, "The worst is yet to come."

[TomCADem]

13. Special Report: Trump told Saudi: Cut oil supply or lose U.S. military support (2020)

Wasn't raising gas prices as a boon to the oil industry the whole point of the Republican/Russian game whether it was rolling back fuel efficiency standard to encourage Americans to buy gas guzzlers, painting Ukraine as corrupt and not worth saving, to pressuring Middle East countries to roll back oil production. The reason why right wing media was cheerleading for a Russian invasion was because it would cause an increase in oil prices.

If it was cheerleading for an invasion of Russia, it would be trying to start a war with Iran. Of course, the last part is to blame Democrats.

It is Al ost as if Republicans were trying to make the US even more dependent on oil importers such as Russia.

https://www.reuters.com/article/us-global-oil-trump-saudi-specialreport/special-report-trump-told-saudi-cut-oil-supply-or-lose-u-s-military-support-sources-idUSKBN22C1V4

In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters.

The threat to upend a 75-year strategic alliance, which has not been previously reported, was central to the U.S. pressure campaign that led to a landmark global deal to slash oil supply as demand collapsed in the coronavirus pandemic - scoring a diplomatic victory for the White House.

Trump delivered the message to the crown prince 10 days before the announcement of production cuts. The kingdom’s de facto leader was so taken aback by the threat that he ordered his aides out of the room so he could continue the discussion in private, according to a U.S. source who was briefed on the discussion by senior administration officials.

The effort illustrated Trump’s strong desire to protect the U.S. oil industry from a historic price meltdown as governments shut down economies worldwide to fight the virus. It also reflected a telling reversal of Trump’s longstanding criticism of the oil cartel, which he has blasted for raising energy costs for Americans with supply cuts that usually lead to higher gasoline prices. Now, Trump was asking OPEC to slash output.

[ck4829]

3. We may have no choice but to go negative on inflation

“Billionaires cause inflation”, “corporate price gouging is a factor in inflation”, and “you think a Republican majority will help with inflation? Ha. All they’ll do is enable Trump’s conspiracy theories!”

These things are all true and they may be the Democratic Party’s lifeline instead of just hoping there’s a magic cure for inflation.

[madville]

11. People won't care about finger pointing so much

If they are still spending more money month after month, they’ll want to see some actual solutions.

[moniss]

5. Of course what is not discussed in media

is that these are year-over-year increases and that the past 2+ years with Covid have kept pricing low/declining for many goods. So now as we emerge from that it is not surprising that companies are "catching up" so to speak. Along with the supply chain issues driving matters, greed in some cases and in the case of energy straight out market manipulation. The media goes for the biggest headline number which includes energy but historically energy has been stripped out of the calculation due to month to month volatility.

Most serious economists expect the core numbers to fall back as the year wears on and into next year. Sadly the GQP will claim it's due to government spending/policy malfeasance and an obedient media will hammer Biden et al relentlessly even though the economists say these figures are not about government spending or domestic policy. People like "Benedict" Manchin will use this as their excuse to not allow any changes on social spending while at the same time telling the voters they would like to but it's that "reckless" Biden that has caused them to have to tighten spending.

[progree]

6. CPI increase last 12 months: +7.91%, last 24 months: 4.75% annualized, ...

24 months ago was Feb 2020, considered the beginning of the pandemic in the U.S. Starting in January 2020 wouldn't have made much difference, there was only a 0.056% increase in the CPI February '20 over January '20, a 0.7% annualized rate. (the data is seasonally adjusted).

February 2020 to February 2021: +1.68%
February 2021 to February 2022: +7.91%
February 2020 to February 2022: +9.72% (4.75% annualized)
February 2019 to February 2022: +12.26% (3.93% annualized)

So some of the latest 12 months increase was sort of "catchup" making up for the low 1.68% increase from February 2020 to February 2021. But still, looking at the last 2 years as a whole (4.75% annualized) or last 3 years as a whole (3.93% annualized) is not very comforting.

CPI: http://data.bls.gov/timeseries/CUSR0000SA0

Year   Jan....... Feb...... Mar...... etc. etc.
2019 252.470 253.135 254.273 255.163 255.325 255.361 255.900 256.179 256.596 257.305 257.788 258.263
2020 258.682 259.007 258.165 256.094 255.944 257.217 258.543 259.580 260.190 260.352 260.721 261.564
2021 262.200 263.346 265.028 266.727 268.599 270.955 272.184 273.092 274.214 276.590 278.524 280.126
2022 281.933 284.182

Monthly changes: http://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth

February 2022 report: https://www.bls.gov/news.release/cpi.nr0.htm

========================================

Most of what follows is not in today's report because it occurred in March, mostly:

Prices used in the CPI report are gathered throughout a given month (in this case throughout February), they aren't "end of month" prices

https://www.democraticunderground.com/111692731

Commodities soar as war builds anxiety over supply shortages, Bloomberg, 3/4/22

... The interruption of shipments from the world's top wheat exporter (Russia), and the world's 6th-largest exporter (Ukraine) - which together account for over 30% of global wheat exports - has pushed commodity prices for the key grain to record highs.

Raw materials more broadly are on a tear this week - with aluminum up 13%; Brent crude oil, 15%; corn, 17%; and wheat, a whopping 41%.

[doc03]

7. March will hit double digits nt

[mahatmakanejeeves]

8. From the source:

Which progree has already linked to. Anyway ...

CPI for all items rises 0.8% in February; gasoline, shelter, food indexes rise

Bureau of Labor Statistics > Economic News Release > Consumer Price Index

Economic News Release USDL-22-0415

Consumer Price Index Summary
Transmission of material in this release is embargoed until 8:30 a.m. (ET) March 10, 2022

Technical information: [phone] • [e-mail] • www.bls.gov/cpi
Media Contact: [phone] • [e-mail]

CONSUMER PRICE INDEX – FEBRUARY 2022

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8 percent in February on a seasonally adjusted basis after rising 0.6 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 7.9 percent before seasonal adjustment.

Increases in the indexes for gasoline, shelter, and food were the largest contributors to the seasonally adjusted all items increase. The gasoline index rose 6.6 percent in February and accounted for almost a third of the all items monthly increase; other energy component indexes were mixed. The food index rose 1.0 percent as the food at home index rose 1.4 percent; both were the largest monthly increases since April 2020.

The index for all items less food and energy rose 0.5 percent in February following a 0.6-percent increase the prior month. The shelter index was by far the biggest factor in the increase, with a broad set of indexes also contributing, including those for recreation, household furnishings and operations, motor vehicle insurance, personal care, and airline fares.

The all items index rose 7.9 percent for the 12 months ending February. The 12-month increase has been steadily rising and is now the largest since the period ending January 1982. The all items less food and energy index rose 6.4 percent, the largest 12-month change since the period ending August 1982. The energy index rose 25.6 percent over the last year, and the food index increased 7.9 percent, the largest 12-month increase since the period ending July 1981.

{mucho snippage}

______________
The Consumer Price Index for March 2022 is scheduled to be released on Tuesday, April 12, 2022 at 8:30 a.m. (ET).


Technical Note

Brief Explanation of the CPI
The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services. The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers. The all urban consumer group represents about 93 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people, as well as urban wage earners and clerical workers. Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, farming families, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals. Consumer inflation for all urban consumers is measured by two indexes, namely, the Consumer Price Index for All Urban Consumers (CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U). The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is based on the expenditures of households included in the CPI-U definition that meet two requirements: more than one-half of the household's income must come from clerical or wage occupations, and at least one of the household's earners must have been employed for at least 37 weeks during the previous 12 months. The CPI-W population represents about 29 percent of the total U.S. population and is a subset of the CPI-U population.

The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected each month in 75 urban areas across the country from about 6,000 housing units and approximately 22,000 retail establishments (department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments). All taxes directly associated with the purchase and use of items are included in the index. Prices of fuels and a few other items are obtained every month in all 75 locations. Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visit, telephone call, or web collection by the Bureau’s trained representatives.

In calculating the index, price changes for the various items in each location are aggregated using weights, which represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. For the CPI-U and CPI-W, separate indexes are also published by size of city, by region of the country, for cross-classifications of regions and population-size classes, and for 23 selected local areas. Area indexes do not measure differences in the level of prices among cities; they only measure the average change in prices for each area since the base period. For the C-CPI-U, data are issued only at the national level. The CPI-U and CPI-W are considered final when released, but the C-CPI-U is issued in preliminary form and subject to three subsequent quarterly revisions.

The index measures price change from a designed reference date. For most of the CPI-U and the CPI-W, the reference base is 1982-84 equals 100. The reference base for the C-CPI-U is December 1999 equals 100. An increase of 7 percent from the reference base, for example, is shown as 107.000. Alternatively, that relationship can also be expressed as the price of a base period market basket of goods and services rising from $100 to $107.

Sampling Error in the CPI

The CPI is a statistical estimate that is subject to sampling error because it is based upon a sample of retail prices and not the complete universe of all prices. BLS calculates and publishes estimates of the 1-month, 2-month, 6-month, and 12-month percent change standard errors annually for the CPI-U. These standard error estimates can be used to construct confidence intervals for hypothesis testing. For example, the estimated standard error of the 1-month percent change is 0.03 percent for the U.S. all items CPI. This means that if we repeatedly sample from the universe of all retail prices using the same methodology, and estimate a percentage change for each sample, then 95 percent of these estimates will be within 0.06 percent of the 1-month percentage change based on all retail prices. For example, for a 1-month change of 0.2 percent in the all items CPI-U, we are 95 percent confident that the actual percent change based on all retail prices would fall between 0.14 and 0.26 percent. For the latest data, including information on how to use the estimates of standard error, see https://www.bls.gov/cpi/tables/variance-estimates/home.htm.

{more snippage}

Contact Information

For additional information about the CPI visit www.bls.gov/cpi or contact the CPI Information and Analysis Section at 202-691-7000 or [e-mail].

For additional information on seasonal adjustment in the CPI visit www.bls.gov/cpi/seasonal-adjustment/home.htm or contact the CPI seasonal adjustment section at 202-691-6968 or [e-mail].

If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.

[IronLionZion]

9. Fed meeting next week should announce a rate hike

and Biden administration efforts to ease supply chain disruptions should help eventually.

Gas prices were very high when I was driving 600 miles a week around 2010-2014 so I get that some folks are impacted badly by prices. But personally I don't drive much now and am sure lots of folks are still working remote long term.

[JT45242]

10. Look at the list of goods/services on the list (CPI)

Food and Beverages (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
Housing (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
Clothes (men's shirts and sweaters, women's dresses, jewelry)
Transportation (new vehicles, airline fares, gasoline, motor vehicle insurance)
Medical Care (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
Recreation (televisions, toys, pets and pet products, sports equipment, admissions)
Education and Communication (college tuition, postage, telephone services, computer software and accessories)
Other Goods and Services (tobacco and smoking products, haircuts and other personal services, funeral expenses)
Also included within the major groups listed

Source [link:https://www.cnbc.com/id/43769766|]

-- New vehicles ... prices up a lot because of supply chain issues and car companies have chosen to make more high profit trucks and SUVs than smaller more fuel efficient and cheaper cars. Solution for people like me in the middle class -- wait to buy and more importantly buy a used car.

-- Airfare -- again -- not hitting this consumer.

-- Housing -- Where I live in a college town, housing is always high. There is no desire to build affordable homes and the frequent flipping and speculation has driven housing costs up. Solution -- zoning boards that require a percentage of affordable housing be set aside out of all new construction.

-- Heating/cooling costs. This is macroscale stuff. My per therm gas charge went up but we have had a mild winter. Plus, we have been on budget billing for years and have let a surplus build up after we replaced our furnace. I know not all can do that -- but it is a way to make the hit on the pocketbook less. You pay more for gas in the summer than you use but you do not have a crzy high bill one month as it gets smoothed over the year.

-- Medical care -- if only there were some way to control medical costs like prescription drug reform, expanding medicare and medicaid. Oh yeah, Manchin blocked it with Synema.

-- Educational costs -- With state legislatures cutting funding to state universities, especially in red states, tuition must increase. Also, fewer international students who pay full tuition (no aid) because of Covid -- the college has to make up that revenue somewhere. Then add the smaller populations both because of delaying because of covid and smaller HS cohorts and colleges and universities are raising tuition because fewer people are paying.

But the year to year calculation instead of a 3 year rolling average does make it look worse than it really is.

[I-Scream]

12. The term "make it look worse than it really is" is worse than annoying. It implies that folks are

unable to judge the impact based upon their own experience. We're not stupid! Even though there are discernible reasons, minimizing inflation is insulting.