CPI DATA and Real Earnings, December Reports 2022

The BLS report was released this morning and it was a surprise. (historical releases) It came in substantially under the forecast by everyone.

Last month, I projected this...

Range of 7.6%~7.9%. Sure things are moderating, but can we count on further reductions in Electricity, Utility (piped) gas service, apparel, Used cars and trucks, and Medical Care services? 

The answer to the question is yes. 

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in November on a seasonally adjusted basis, after increasing 0.4 percent in October, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 7.1 percent before seasonal adjustment.

The index for shelter was by far the largest contributor to the monthly all items increase, more than offsetting decreases in energy indexes. The food index increased 0.5 percent over the month with the food at home index also rising 0.5 percent. The energy index decreased 1.6 percent over the month as the gasoline index, the natural gas index, and the electricity index all declined.

The past 5 months (June to November) has been at an annualized rate of +1.13%. For comparison, the previous 5 months of January through June was an annualized rate of +12.94%. A major improvement in inflation, although it could be due to lower demand. Have to wait and see. 

For the first time in quite a long time, my monthly change was negative. Using the aforementioned 5 month ranges, the last 5 months was at annualized +1.41%, compared to prior 5 month annualized, of +10.94%. For year over year, My CPI stands at +6.7%

Hourly earnings have just about caught up with pre covid earnings. Real Earnings

I have done such a bang up job on predictions, I will not make any bold predictions for the future, although significant easing of energy prices is underway... although I suspect that might come to an end very soon.