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‘Inflation is Heating Up’: CPI Hit 9.1% in June, Highest Rate in 41 Years

‘Inflation is Heating Up’: CPI Hit 9.1% in June, Highest Rate in 41 Years

“Though CPI’s spike is led by energy and food prices, which are largely global problems, prices continue to mount for domestic goods and services, from shelter to autos to apparel.”

The Consumer Price Index (CPI) went up 9.1% from 12 months ago after experts predicted an 8.8% increase.

The 9.1% includes fuel and food, which are considered volatile. Without fuel and food the core CPI increased 5.9%:

On a monthly basis, headline CPI rose 1.3% and core CPI was up 0.7%, compared to respective estimates of 1.1% and 0.5%.

Taken together, the numbers seemed to counter the narrative that inflation may be peaking, as the gains were based across a variety of categories.

“CPI delivered another shock, and as painful as June’s higher number is, equally as bad is the broadening sources of inflation,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Though CPI’s spike is led by energy and food prices, which are largely global problems, prices continue to mount for domestic goods and services, from shelter to autos to apparel.”

The gasoline index rose 59.9%, which is the most since March 1980.

Energy went up 7.5% in June after a 3.9% increase in May. The energy index increased 41.6% from 12 months ago.

The food at home index rose 12.2% over the past 12 months, which is the largest since April 1979.

Rental costs went up 0.8%, the biggest increase since April 1986.

Medical went up 0.7%. Dental costs climbed 1.9%, the largest since 1995.

The CPI report will likely make the Fed act:

“Rather than cooling down, inflation is heating up,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. “While a pullback in gasoline costs in July and reported retail discounting will help tamp down the flames, the broad pressure in the core rate, led by plenty of inertia in rents, suggests inflation may not peak for a while, and might remain stubbornly high for longer than anticipated.”

Fed policy makers have already signaled a second 75 basis-point hike in interest rates later this month amid persistent inflation as well as still-robust job and wage growth. Even before the data were released, traders had already fully priced in such a move. Now, they also see around a one-in-three chance that it could be a full percentage point.

Bottom line: Inflation is out of control and no one has any idea what to do about it.

Putin’s price hike, y’all.

June 2022 CPI by Mary Elizabeth on Scribd

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Comments

taurus the judge | July 13, 2022 at 11:06 am

Part of it is a lie ( as any MBO, CPA or other finance person who actually tells the truth knows)

They ( the policy makers) do know both the cause and the cure. (Trump was doing it)

They deliberately caused this scenario (Cloward Piven) to break the US which is the engineered goal and manage our decline.

They are deliberately protecting the scenario because its necessary to drain the wealth of the middle class ( to redistribute).

Don’t buy the lie. Trump saw this and was stopping it- that’s what created the unholy alliance to remove him.

We must retake the Fed one state at the time- nothing else has any possibility of success.

    Eddie Baby in reply to taurus the judge. | July 13, 2022 at 11:12 am

    Trump was doing it and making the inept political class look like fools. The solutions are not that complicated, but they don’t pay as well for our “leaders.”

      taurus the judge in reply to Eddie Baby. | July 13, 2022 at 11:22 am

      I don’t think “fool” is the right word nor “inept”.

      If they were truly “inept” then accidentally they would occasionally fix something (law of averages)- actually they are quite deliberate in milking us for their benefit and that’s anything but “inept”.

      Trump made them look like the CRIMINALS they are. ( He unmasked them)

    healthguyfsu in reply to taurus the judge. | July 13, 2022 at 1:43 pm

    You will notice that MAGA and BBB slogans have one key “A” word difference in them.

    Built back better for whom? The WEF?

    dunce1239 in reply to taurus the judge. | July 14, 2022 at 4:07 pm

    I remember just a couple of years ago when the government announced it was struggling to get to a %2 inflation rate. It is much easier to pay back debt with inflated dollars. Borrowing money at near zero rates and later paying that debt back with money inflated at %9 allows the government to spend even more.

“Bottom line: Inflation is out of control and no one has any idea what to do about it.”

The US can always ramp up oil and gas production for starters. There is a lot that can be done if our “leaders” want to solve the problem.

And the CPI was computed differently forty years ago, so inflation is much higher now using the old metrics.

    LibraryGryffon in reply to Eddie Baby. | July 13, 2022 at 1:03 pm

    I had read that if we used the method from the ’80s the figure would be more like 20%. I can easily believe this, having lived through several years of this level of inflation in Ireland.

    Been there, done that, do NOT want the T-shirt.

    MattMusson in reply to Eddie Baby. | July 14, 2022 at 6:43 am

    We are ramping up oil and gas production. But, the increase will go to Europe or China.
    China just signed long term deals for 14 million tons of US LNG. 14 million tons is a lot of gas!

2smartforlibs | July 13, 2022 at 11:15 am

What needs to be addressed is why so many low IQ support this.

    taurus the judge in reply to 2smartforlibs. | July 13, 2022 at 11:25 am

    Because they were told to by their “leaders”

    We now have an emerging batch of semi literate immature “soys” who cant think beyond a browser and they are wandering around waiting to be told what to do and accept what they hear because they don’t have the knowledge/intelligence to figure it out themselves or the intellectual critical thinking/maturity to deal with it if they did.

    henrybowman in reply to 2smartforlibs. | July 13, 2022 at 12:19 pm

    It’s just the same old Hitler Youth movement, but normalized for maturity, so there’s now a higher age cutoff for recruits.

    healthguyfsu in reply to 2smartforlibs. | July 13, 2022 at 1:45 pm

    Just enough Far left cultists to make it look legit with a bunch of bots that will vote Dem in elections even though they are NPCs.

    randian in reply to 2smartforlibs. | July 13, 2022 at 11:55 pm

    What needs to be addressed is why so many low IQ support this.

    They lack the intelligence to distinguish lies from truth.

So long as the Fed doesn’t accommodate wage increases, it will end when the shortages end. All price is doing now is allocating scarce goods to the most efficient uses.

If you allow wages to rise to meet it, it disables that plateau in prices and they have to rise again in order to ration scarce resources.

What to do about it – less regulation, renewed energy production, stop sending workers money to stay at home and not produce stuff.

    Massinsanity in reply to rhhardin. | July 14, 2022 at 10:27 am

    PPI just clocked in at 11.3% well ahead of the 10.8% expected. Either producers raise prices to meet their costs or profitability drops sharply.

    Pick your poison.

Some of these increases are becoming embedded. Rent and mortgage costs for one. At a minimum these increases for housing ripple throughout the economy. People can’t buy the same home they could even 6 months ago with the same mortgage cost. That hurts existing sales from two directions; less new buyers and some existing homeowners decide to stay put with mortgage they have which reduces supply of homes for sale.

The PPI numbers will give us a better look at whether we are at a plateau or have more upside in future inflation. IMO until the Fed becomes far less accommodating and our regulatory state takes their foot off our necks we can expect it to continue despite short term demand destruction.

    Peabody in reply to CommoChief. | July 13, 2022 at 12:40 pm

    No silver lining there.

      CommoChief in reply to Peabody. | July 13, 2022 at 3:24 pm

      Gold, silver, lead bullets, steel firearms and aluminum cans full of food might be the ultimate silver lining, at least for those folks able to acquire and keep them.

    MattMusson in reply to CommoChief. | July 13, 2022 at 12:44 pm

    So far things are going up. Next we will see the price of Services skyrocket.

      CommoChief in reply to MattMusson. | July 13, 2022 at 3:27 pm

      No doubt. Labor costs gotta go up as employers compete for workers. Not to mention the fact that even services have increased utility bills and increased costs for supplies and leases and….

At this rate we will all be so broke we can’t pay attention.

Your darn tootin’
We love fig newton
But that darn Putin
Our economy he’s lootin
Fig newton soon–maybe
Out like formula for baby

Yesterday: one ¾”x4′ galvanized pipe and one elbow: $40.
Brandon Delenda Est.

“Experts” wrong again. Our choices are two: raise interest rates until inflation is crushed and then go through a sharp correction and short recession OR continue to play whack-a-mole by easing rates when economic data worsens and then raise rates again when inflation keeps accelerating and then suffer through an endless stagflation economy that continues shrinking.

The solution is to allow the market to correct all of the mal-investment produced by all of the government interference (ESG and bailouts) and allow zombie companies to go bankrupt. Then allow the capital to again flow to the most efficient companies. Market takes off to set new highs within 2-3 years. Allow the market to work! Get the regulators to do their job too!

    You’re missing a third option: Stop dumping massive amounts of unfunded money into government spending. The money supply is frankly nuts because the Dems were more than happy to flush trillions of dollars into their favorite projects during the pandemic response and after, thus making the wild spending they demanded during the last year of the Trump administration pale in comparison to the flood of dollars they unleashed the moment the current administration started.

    And the kickbacks have been *epic* for the Dems (and other swamp-creature politicians)

Great Job Pedophile. F*ck Joe Biden and anyone stupid and immoral enough to vote for the pedophile b*stard.

“Highest Rate in 41 years”
****
That maybe very misleading. The method to calculate inflation has been altered several times, IIRC, a major change made in mid-80s. Read that if todays inflation rate was calculated in a similar fashion to how it was determined 40 years ago, today’s rate would be 17-20%.

I remember very well the odd-even gas days, 5 gal. limit and a 16% home mortgage rate of the Carter years and I think today’s trends have a feeling of a much worse outcome.

RandomCrank | July 13, 2022 at 2:21 pm

The comments in this thread are ignorant and unhinged. It’s actually amusing in a weird way. And this is not me somehow defending Senile Joe or Fed policy.

Anyway, inflation hurts the young and the middle-aged the worst. If you’re old and own your house, your housing cost is fixed and your big-ticket purchases are mostly done. It’s why that TV advertising “demo” is 25-54. Inflation doesn’t hurt you nearly as much. And Social Security checks will go up by 9%-12% depending on how CPI-W behaves in Q3.

If the Republicans have any brains (big “if”), they’d target their inflation message at the younger people not the older. These are the renters, the first-time home buyers, the people who are in their prime consumption years. It’s a political I.Q. test.

    henrybowman in reply to RandomCrank. | July 13, 2022 at 2:33 pm

    “If you’re old and own your house, your housing cost is fixed”

    Your utilities, maintenance, and property tax bills aren’t.

    “and your big-ticket purchases are mostly done.”

    If your idea of retirement is sitting on the couch watching Matlock.

      RandomCrank in reply to henrybowman. | July 13, 2022 at 2:46 pm

      Inflation doesn’t hit old people nearly as much. I didn’t say it doesn’t hit, but only the degree is much less for old folks who don’t rent. The couch is paid for. Younger people who are renting and entering their high-consumption years get hit much, much harder. If the Republicans don’t see it, they’re blind. Not that it’ll surprise me.

        CommoChief in reply to RandomCrank. | July 13, 2022 at 3:48 pm

        Inflation hits folks who spend money the hardest and yes that tends to be those in the 25-54 demo for homes, but that’s not the only big ticket item.

        Early retirees and there are some extras from the stupidity of ‘get a jab or lose your job’ fiasco are healthy and wealthy enough to enjoy life for a decade or so. How many 55-64 year olds are buying RV, going on long trips to places on their bucket list, clogging up golf course tee times, shooting ranges, buying their dream car and so on? Many.

        Retirees 65-72 slow it down a bit but still get out and spend occasionally. Those 73 + as their health begins to decline more accurately fit your description.

          RandomCrank in reply to CommoChief. | July 14, 2022 at 9:50 am

          One-third of home owners have no mortgage. Their houses are full of stuff; they’re not buying furniture and appliances. They don’t drive a lot, but probably have two cars anyway. Their kids are out of college; no tuition to pay.

          Do they still buy stuff? Sure. Of course. But they don’t buy nearly as much. But fine, Republicans, be stupid. Sell inflation to old voters who you have anyway, and ignore the young who are hurt much worse. After all, you’re Republicans. You are idiots, just like the Democrats.

          CommoChief in reply to CommoChief. | July 14, 2022 at 10:40 am

          RC,

          There is a bit more to the demographic split than the simplistic breakdown you suggest.

          In 2020 election:
          74% of those 65+ voted
          The split was 51% DJT to 48% Biden 1% other

          Quinnipiac Poll (last week)
          Biden’s Job performance
          65+ – 43% approve
          18-34 – 22% approve

          As you can see older voters supported Biden at high levels in 2020. They continue to support Biden. In fact these voters comprise the highest level of enduring support for Biden.

          The myth that older (65+) voters choose r not d is simply not true. The polls consistently show that the highest level of support for Biden comes from those 65+.

          r do not have a lock on older voters.

RandomCrank | July 13, 2022 at 2:42 pm

Next shoes to drop:

1. Xiden begs the Saudis. What will they do?

2. Nordstream maintenance period ends. July 21. Does Putin keep it shut down and send Germany and the EU into a depression?

3. Fed meeting. July 27. 75bp or 100?

3. Corporate earnings estimates get updated. Reports start this week, then there’ll be updates from the analysts. No fixed schedule. Estimates have to come down.

——

We are already in recession. The depth and implications for employment are the big questions.

The S&P 500 is looking over a cliff. It’s a long way down.

Car loan deliquencies are a classic recession indicator, and they are flashing red.

The 2-year Treasury v the 10-year Treasury is another classic. If the 2 year is higher than the 10-year, that’s an “inverted yield curve,” and look out below. It is now unambiguously inverted.

I don’t know the date of the release of GDP for Q2. It will be negative, as was Q1. The smart guys have known the recession started in Q1.

High tech is already being hit. Demand for computers and smart phones is way down, and the layoff announcements are trickling out.

New York City’s budget is already being hit by lower tax collections from Wall Street.

    RandomCrank in reply to RandomCrank. | July 13, 2022 at 2:50 pm

    Residential real estate is the driver of the American economy. Mortgage refinancing is dead, and the layoffs are large and accelerating. Sales of new and existing houses are weakening rapidly. A lot of retail and construction is connected to home sales. We’re going to see a bunch of pigs working their way through the python in this quarter, Q4, and next year.

    RandomCrank in reply to RandomCrank. | July 13, 2022 at 2:58 pm

    The biggest item on that list, by far, is Nordstream. I really have to hand it to Xiden and the EU in a grimly amused way. They did the impossble, imposing sanctions that have given Putin the whip hand. Russia’s current account surplus is the biggest in 30 years, and the BRICs are ignoring us.

    Brazil just cut a deal with Russia for fertilizer and diesel. They export a lot of soybeans to China. When will they start accepting yuan? Maybe if Russia also does? This is what happens when the U.S. and the EU are “led” by morons.

    CommoChief in reply to RandomCrank. | July 13, 2022 at 4:04 pm

    RC, I like the rest of your analysis.

    The Saudis maybe have another 250k -400k bpd of sustainable capacity tops. Use it now or wait for a black swan? Cause that’s about it production wise to address any unforseen event.

    Maintenance- If I were Russia I would make lots of noise about how the sanctions prevented me from getting it done or at least on time. Try to get some additional concessions from the west while teasing the flow rate and the start date.

    Fed Reserve hopefully a full point. Then another. Maybe that will be enough to slap some sense into the markets that there won’t be a another ‘fed put’ because we can’t afford it, not to mention we don’t want to extend our asset bubble and end up like Japan or worse.

    Earnings will be a hoot. Do they lie or tell the stark truth? The days of ‘buy our IPO and keep investing in our fuzzy (maybe false) growth projections until we actually turn a profit in a decade or two’ can’t end too soon.

      RandomCrank in reply to CommoChief. | July 14, 2022 at 11:21 am

      I think we are in a historic period right now. The tectonic plates are shifting. Americans have become instant gratification junkies, so we think everything will happen all at once. It won’t, but 2022 and 2023 are going to be years to remember, and not happily.

      Let’s take one little thing, Putin. It is just phenomenal to see how badly the U.S. and Europe have handled him and the Ukraine situation. I hold ZERO affection for Putin or the Russians, but put that aside and step into his shoes. Here’s my speech to the Russian people:

      “I am announcing today that Russia will never provide natural gas to Europe at any price. The European Community and the United States stole half a trillion dollars of our currency reserves, meaning that our previous sales to them were for free. They have openly declared their intention to ruin our economy.

      “My fellow Russians, there will be difficulties, but they will be nothing compared to what this country suffered in the Great Patriotic War. The West thinks they can conquer us with money? Russia lost 26 million men between 1942 and 1945, and the West thinks they will conquer us with money?

      “No, they will not. The West is not our only customer. The pipelines to Europe are closed, and will remain closed. I might mention that, because the West’s sanctions have driven prices up, our foreign trade position has never been better. It will take time to arrange new sources of goods, but we are already well along the way.

      “The West thinks its money will run the world. I say: Ask China, Brazil, India, Iran, Saudi Arabia, the Emirates, Hungary, Turkey, and Pakistan what they think of the West and their dollars and their euros.”

        CommoChief in reply to RandomCrank. | July 14, 2022 at 3:03 pm

        No doubt the gang of Western Nations pushing the ‘liberal world order’ and the importance of the rules those Nations wrote which coincidentally benefit them are looking at being hoist on their own petard.

        They have succeeded in bringing the BRICS + other resource rich Nations together in questioning why they should continue to participate and play by financial rules designed to hurt them.

        The parallel International payment systems being set up or in some cases dusted off are likely to endure beyond this immediate beta test phase. The US, under different leadership, can still thrive due to our abundant resources. Europe? Not so much, at least not as a whole.

        The Euro is likely to break parity and then the weight of southern Europe’s ‘s debt and crap economies will split them off from the EU or at least from using the euro. The Germans and N Europe can’t afford to subsidize them while rebuilding their energy system away from Russia.

RandomCrank | July 13, 2022 at 3:00 pm

If the Repubs have three-digit I.Q.s, they will run mid-term ads featuring couples in the late 20s and 30s talking about what inflation is doing to them. If they’re stupid, they’ll focus on old people.

    RandomCrank in reply to RandomCrank. | July 13, 2022 at 3:04 pm

    Oh, and they’ll make sure that there are lots of Latinos in those ads. They will focus entirely on kitchen table economics, and leave the other grievances for 2024. If you want the Repubs to sweep, you don’t want them to play the social issues game. Let the Dems yammer about that crap. The Repubs should hit HARD on inflation’s impact on younger people who are just starting out. THAT is where the votes will be. Do they realize it?

    RandomCrank in reply to RandomCrank. | July 13, 2022 at 3:09 pm

    To the extent that they play to old folks, they should run sarcastic 1970s nostalgia ads featuring Jimmy Carter and gas lines. But that should be a sideline. Hit HARD among the young. Cannotn hit too hard. Don’t be clever. Be as blunt as blunt gets. Do the Republicans want to win? How badly?

nordic prince | July 13, 2022 at 4:17 pm

Inflation is a helluva lot more than what they say it is. Just bought a used car (2018 Nissan Altima with 100K on it), private party. Never thought I’d see the day that USED cars have a 5-digit sticker.

While Biden was napping, Putin sneaked into the Oval Office and signed an executive order raising gas taxes. His EO was challenged in the Supreme Court and was approved by a 6-3 vote. That’s why it’s called Putin’s gas tax increase.