CPI DATA and Real Earnings, January Reports 2023

The BLS report was released this morning and it was within target range. (historical releases)

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in December on a seasonally adjusted basis, after increasing 0.1 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 6.5 percent before seasonal adjustment.

The index for gasoline was by far the largest contributor to the monthly all items decrease, more than offsetting increases in shelter indexes. The food index increased 0.3 percent over the month with the food at home index rising 0.2 percent. The energy index decreased 4.5 percent over the month as the gasoline index declined; other major energy component indexes increased over the month.

Much is made of the CPI decline over the past six months, but there is a recurring theme...

The index for gasoline was by far the largest contributor to the monthly all items decrease, more than offsetting... [insert item]

My CPI continues to improve...

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

It is now a mere 1¢ below February 2020 level per hour. Weekly earnings are still -$1.30 to February 2020. Almost there.

Pump prices have leveled off. Other energy prices will level off very soon. Both will start to rise going forward into the summer months.

Core inflation has been mainly in check for the past three months due to adjustments in the medical area, as well as a continuing slide in used car prices. The Medical adjustments were a 4th quarter one and-done. The used car slide may continue.

Maybe I am a cup-half-empty guy, but I don't see inflation returning to acceptable levels before the fall. 

However, a recession might bring it down faster.