Breakdown of CPI DATA and Real Earnings, July 2022

It is that time of month, to survey the damage from inflation. The BLS report was released this morning and it was a surprise. (historical releases)

This is what I projected for the month...

So, I will project 0.3%~0.5% month to month and a reading of 8.9%~9.1%. I fervently hope I am over shooting, this time. 

I did overshoot, as well as many others. 

The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July on a seasonally adjusted basis after rising 1.3 percent in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.5 percent before seasonal adjustment.

My own personal CPI was up a bit, after all the checks, credit cards, etc. were accounted for...

My annual rate is 7.8%, which is better than the CPI-U and CPI-W. Which brings me to the C.O.L.A. 

As July is 1/3 of C.O.L.A., it is very important. The forecast took quite a hit, from last month...

It would probably be best to state the 8.6%~9.0% is the high range, with expectations of a slide from there. 

However, while the CPI-U inflation number of 8.5% seems like an improvement, the food section is worrying. The report avoided the "food at home" on annual basis of 13.1%, although it did mention the 1.3% month to month rise, which is the 7th consecutive month of 1.0% or higher. Chew on that!!

While it is noted that gasoline fell, electricity has now risen 15.2% y/y and 3rd consecutive m/m increases of over 1%, with July at 1.6%.

The Real Earnings report also came out this morning...

Hooray, an uptick away from the downward trend, and getting closer to real earnings of pre-Covid.

Weekly earnings mirrored the hourly earnings. Both are due to a flat month to month CPI report, which is better than the opposite. Is it the start of a trend?

Not a bad set of number, considering the expectation. 

Now for next month's CPI-U, and here's hoping I am once again overshooting... month over month at 0.0%~0.2% and year to year of 8.3% to 8.5%. 

While gasoline is expected to have similar drops, relative to July's numbers... they are currently nearing their floor. The rest of the energy section will continue to rise, and likely food at home. This ain't over.

Even the 16% Trimmed Mean and the Median says it ain't over. Tomorrow's PPI might provide a hint.