Breakdown of CPI DATA and Real Earnings, February 2022

The BLS Report from February, 

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.

From Last Month... The forecast for February numbers, due out in March are 7.59%~7.9%. So it was on the upper end. Remember this is inflation for the month of February.

With this release comes a variety of other numbers...

I am at a 5.9% annual rate...

This rise was largely attributable to food at home, which on the BLS report, outpaced the overall inflation rate at 8.6%

The forecast for March is a bit blurry, due to energy prices, but the expectations would be 8.2% ~ 9.1%. I would unhappily lean towards the 8.7% range, just based on the rapid rise of gasoline during this month, although it may be peaking as I type. I would expect the upward trend in food prices to continue. 

Of course it is all speculation, as we are not at mid month, but I feel it is safe to say that prices will not recede.

On to the earnings report...

This was a disappointment, with an -11¢ per hour decline. Maybe weekly earnings improved...

NO. For the 3rd straight month real weekly earnings declined. Remember all the data thus far is for February.

Going forward, we must remember the 8.0% number, as that rate of inflation is largely without the impact of the Russia-Ukraine war. The impact of the war on energy and food costs is yet to come. We must also remember that weather impacts food costs and with spring around the corner and the thought of summer vacations on the horizon... energy costs will likely rise as inventories of petroleum products are at or below the 5 year range. 

Earlier I mentioned the expectations of inflation rates for our current month, due out in the 2nd week of April. Going forward into April potential expectations, the inflation rate for a month to month increase is staggering (think June 2008 or 9-2005's Katrina or 1-1990 Gulf War) as well as the double digit year to year (Oct-1981). 

I suspect the economy will begin to cool at about this time and the longer range inflation forecasts indicate as much. Tuesday will bring the PPI report out and some indication of pricing going forward might be seen. It will be followed the next day with retail sales, which should be interesting. A lot of revisions, etc. last month under the guise of "usual annual" stuff, so it will be interesting to see the spin on that report.

Buckle up, the peak is still a ways off, imo.