Breakdown of CPI DATA and Real Earnings, August 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...

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%. 

Well, it was... 

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in August on a seasonally adjusted basis after being unchanged in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.3 percent before seasonal adjustment. 

Gasoline fell much, much further than last month and failed to provide cover for all the other areas, which are inflating. 

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Unadjusted remains sort of flat. Meanwhile my personal inflation rate edged up to 7.9%, with a +0.26% month to month increase. 

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On to the C.O.L.A. ... The CPI-W slid -0.2% for the month, which essentially narrowed the range for C.O.L.A. adjustments.

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Frankly speaking and after checking my pencil for an eraser... I'll pencil in 8.7% as the most likely C.O.L.A. The September CPI-W has a very wide range, as can be seen. Either side of the 8.7% figure is also a rather wide range.

As for the Real Earnings...

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The hourly is edging up slightly, but still below February 2020 rate.

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The weekly level slipped this month (all inflation adjusted) and is still below the February 2020 level.

For next month's projection, another wide range... 7-8%~8.3%, with month to month of -0.1~ up to 0.3%. The drop in gasoline failed to cover all the other areas, and the drop in gasoline for September will be much smaller, in my opinion. 

I guess what I am saying is... there could easily be another upside surprise, when the September numbers come out. I sincerely hope not. It has nothing to do with stocks, Federal Reserve or Macro Economics. I am just a poor schmuck getting squeezed.

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.