February inflation — +0.1% CPI seasonally adjusted

posted at 7:21 pm on March 18, 2014 by Steve Eggleston

The Bureau of Labor Statistics released the February Consumer Price Index report earlier today:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.1 percent before seasonal adjustment.

An increase in the food index accounted for more than half of the all items increase in February. The food index rose 0.4 percent in February, driven by a 0.5 percent increase in the index for food at home, with four of the six major grocery store food group indexes increasing. The energy index declined, with a decrease in the gasoline index more than offsetting sharp increases in the fuel oil and natural gas indexes.

The index for all items less food and energy also rose 0.1 percent in February. An increase of 0.2 percent in the shelter index was the major contributor to the rise, but the indexes for medical care, airline fares, personal care, recreation, and new vehicles also increased. In contrast, the indexes for household furnishings and operations, apparel, used cars and trucks, and tobacco all declined in February.

The seasonal adjustment on gasoline must be rather powerful. Here in southeast Wisconsin, the annual skyrocket of gasoline prices began just after February started, going from $3.15/gallon at the beginning of the month to $3.50/gallon by the end of the month.

Reuters noted that the “core CPI”, which strips out energy and food, did increase by 1.6% over the past 12 months. It, however, is well below the 2% inflation rate targeted by the Federal Reserve, with the measure watched by the Fed, the index of personal consumpition expenditures, even lower than that.

The Wall Street Journal reports that the inflation of food prices is both expected and long-term:

Surging prices for food staples from coffee to meat to vegetables are driving up the cost of groceries in the U.S., pinching consumers and companies that are still grappling with a sluggish economic recovery.

Federal forecasters estimate retail food prices will rise as much as 3.5% this year, the biggest annual increase in three years, as drought in parts of the U.S. and other producing regions drives up prices for many agricultural goods. The Bureau of Labor Statistics on Tuesday reported that food prices gained 0.4% in February from the previous month, the biggest increase since September 2011, as prices rose for meat, poultry, fish, dairy and eggs.

Globally, food inflation has been tame, but economists are watching for any signs of tighter supplies of key commodities such as wheat and rice that could push prices higher.

In the U.S., much of the rise in the food cost comes from higher meat and dairy prices, due in part to tight cattle supplies after years of drought in states such as Texas and California and rising milk demand from fast-growing Asian countries. But prices also are higher for fruits, vegetables, sugar and beverages, according to government data. In futures markets, coffee prices have soared so far this year more than 70%, hogs are up 42% on disease concerns and cocoa has climbed 12% on rising demand, particularly from emerging markets.

Drought in Brazil, the world’s largest producer of coffee, sugar and oranges, has increased coffee prices, while dry weather in Southeast Asia has boosted prices for cooking oils such as palm oil.

In a separate story, the WSJ notes that beef prices jumped by 4% in February, posting their largest 1-month jump since November 2003 and the foreign-only portion of the mad cow disease scare.

That 2.5%-3.5% prediction of food inflation, if it comes to fruition, would be the biggest jump since 2011′s 3.7%. The two-month 0.5% increase suggests a 3.0% increase, which would be right in the middle of the prediction spread.

Something is missing from the WSJ analysis of food inflation — the use of corn for fuel. Even though corn yields were better last year and the corn futures prices plummeted from their fall 2010-summer 2013 range, the futures prices are still significantly elevated compared to the longer historical trend.


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Super accurate … so long as you don’t eat, pay rent/mortgage or buy gas

PolAgnostic on March 18, 2014 at 7:23 PM

Oh … and NO kids allowed!

PolAgnostic on March 18, 2014 at 7:23 PM

Another Reason she’s right. AGAIN.

portlandon on March 18, 2014 at 7:24 PM

We are so screwed…

OmahaConservative on March 18, 2014 at 7:28 PM

Historians will someday look back at us and wonder.. How did this happen with a Constitutional Republic…

Then they will read this:

When the people find that they can vote themselves money, that will herald the end of the republic.

celt on March 18, 2014 at 7:37 PM

…posting their largest 1-month jump since November 2003 and the foreign-only portion of the mad cow disease scare.

Is Rachel Madcow still on TV?

Electrongod on March 18, 2014 at 7:39 PM

Inflation up o.1%

Heh

That’s like saying unemployment is 6.7% after the effects of not counting 10,000,000 missing people

This is no different than the old Soviet regime saying they were having a bumper crop of wheat while millions were starving. Every economic statistic that comes out of this regime is bogus. Vapor.

Franklin100 on March 18, 2014 at 7:39 PM

so long as you don’t eat, pay rent/mortgage or buy gas

Or heat your house, other then that.

lowandslow on March 18, 2014 at 7:42 PM

Globally, food inflation has been tame, but economists are watching for any signs of tighter supplies of key commodities such as wheat and rice that could push prices higher.

Tame, Seriously? In the US the beef herd is at it’s lowest ever recorded due to record high consumer beef prices and Americans switching from beef to pork and chicken because of that.

Johnnyreb on March 18, 2014 at 7:42 PM

With these numbers, we are now officially in a Depression

Brock Robamney on March 18, 2014 at 7:46 PM

Food and energy are NOT part of the CPI .
Look at food prices …. its amazing !

Lucano on March 18, 2014 at 7:50 PM

Globally, food inflation has been tame, but economists are watching for any signs of tighter supplies of key commodities such as wheat and rice that could push prices higher.

Look at the WSJ consumer price index. Inflation has been steadily increasing for years. Exports have decreased, income has decreased, this is the classical definition of Depression

Brock Robamney on March 18, 2014 at 7:51 PM

Lies, lies and more lies.

VorDaj on March 18, 2014 at 7:53 PM

These inflation numbers are about as accurate as Obama’s unemployment numbers. That is to say rigged.

The government needs to report low inflation because Social Security and other retirement incomes are adjusted upward based on the rate of inflation. Low inflation saves them money.

Kaffa on March 18, 2014 at 7:57 PM

Any talk of inflation is an insane prattle. All prices are stable. No one is unemployed. All the sick are being healed. The combined united forces of our Gay and Muslim troops have just achieved another glorious victory over the Russian Christian forces and have now pushed them all the way back to St. Louis.

VorDaj on March 18, 2014 at 7:58 PM

Its cute that you believe the government numbers on this. So cute.

Aquateen Hungerforce on March 18, 2014 at 7:59 PM

It’s a disaster.

forest on March 18, 2014 at 8:05 PM

The piecemeal WSJ rationale on food price inflation seems sort of artificial.

Axe on March 18, 2014 at 8:05 PM

After nearly six years, I think it’s time to stop referring to this as some sort of tepid recovery; this is progressive economics at its very best.

BKeyser on March 18, 2014 at 8:16 PM

In about 10 years, the only consumer item that will factor into the CPI will be Kleenex boxes, 100 count, blue, Spring Meadow scent.

Until the cost of pulp wood skyrockets, anyway.

BobMbx on March 18, 2014 at 8:20 PM

A lot of the leftist loons have Rachel Madcow disease.

anotherJoe on March 18, 2014 at 8:33 PM

Inflation up o.1%

Heh

That’s like saying unemployment is 6.7% after the effects of not counting 10,000,000 missing people

This is no different than the old Soviet regime saying they were having a bumper crop of wheat while millions were starving. Every economic statistic that comes out of this regime is bogus. Vapor.

Franklin100 on March 18, 2014 at 7:39 PM

+1
.
.
.
none of these people have been to a store in the last year or so !

KOOLAID2 on March 18, 2014 at 8:34 PM

Has anyone told Barry that inflation is a hidden tax that affects the poor disproportionately?

On second thought – NEVER MIND!!
He’s too much of an idiot to understand. He’ll just repeat his “no new taxes on the Middle Class” crapola and tell people to inflate their tires and ditch cable.

This would be hilarious if it wasn’t so tragic.

Pelosi Schmelosi on March 18, 2014 at 8:42 PM

Surely there’s a number like the u6 for unemployment that includes everything, not some arbitrary omissions/inclusions. But even then, could you trust it? I’m skeptical….
Also, did anyone else note that at the beginning of the Obama administration, the government changed how they calculate what poverty is to a relative scale, rather than as a comparison to a fixed basket of necessary items? See what that does? It guarantees that there will always be a group classified as “in poverty”. Quite a justification for endlessly expanding government–at some point the poorest millionaire in Beverly Hills would be classified as in poverty due to his position in respect to all the other millionaires!
Ridiculous……

Doc Holliday on March 18, 2014 at 8:45 PM

Anybody have the inflation #’s on lobatas ?
Good , send me to Moochelle .

Lucano on March 18, 2014 at 8:47 PM

The seasonal adjustment on gasoline must be rather powerful. Here in southeast Wisconsin, the annual skyrocket of gasoline prices began just after February started, going from $3.15/gallon at the beginning of the month to $3.50/gallon by the end of the month.

If we had a Republican in the White House, there would be marches on DC to protest gasoline prices, and congressional preenings and roastings of oil company executives demanding to know why gasoline is so expensive.

Crickets.

slickwillie2001 on March 18, 2014 at 9:18 PM

Here in California, milk prices have gone up $.75 – $.90/gallon in the past 2 months – and we’re hearing that because of the draught, we will be seeing prices as much as $1 more per gallon by the end of June.

Beef and pork prices have also increased, although not as much. Whole chickens that sold a few weeks ago for $.89 / lbs are now selling from the same source at $1.69 / lbs.

The draught and related water mismanagement by the Democrat led State government will also be driving fresh fruit and vegetable prices higher – and I’m seeing more produce from outside the US than I’ve seen in a long time. That means higher prices and lower quality.

Our spring gasoline price increases have started a bit early – with prices going locally from $3.45 / gallon to $4.09 / gallon in the past 3 weeks. Word is that we’ll top out about $4.50 – $4.75 / gallon by May.

What the marketplace reflects is not reflected within the materials being provided by this Administration. As much as this Administration tries to define perception over and above what reality is – the harder it is to hide what reality is.

At this point, when it comes to the Obama Administration’s data on inflation – they’ve got about as much credibility as the Orwellian Ministry of Plenty.

Athos on March 18, 2014 at 9:35 PM

The nitwits in Washington should be forced to go out and pay for their own groceries and they would see the infaltion first hand like the rest of us.

I was talking to a car dealer today. He said they had been to 2 auctions and didn’t buy a thing. Prices were too high. Their lot is kind of empty.

crankyoldlady on March 18, 2014 at 9:36 PM

This is total BS. Between my $750 January electric bill (our coal plants are being shut down due to regulations)and my first ever out of pocket medical expenses of over $1200 in March (my new policy cost 100% more since 2012 with twice the deductible) this country is doomed. Food is no less than 25% higher just in the past 4 years alone no matter what they are saying. The liberals just don’t understand that someone has to pay for all this waste and on top of everything else I pay 20%+ in income tax. For the first time in my life my wife and I are actually considering other countries to retire to. If the 2014 elections don’t set a new direction we won’t make it to 2016 and don’t see any leadership to fix this mess.

tej on March 18, 2014 at 9:36 PM

This is total BS. Between my $750 January electric bill (our coal plants are being shut down due to regulations)and my first ever out of pocket medical expenses of over $1200 in March (my new policy cost 100% more since 2012 with twice the deductible) this country is doomed. Food is no less than 25% higher just in the past 4 years alone no matter what they are saying. The liberals just don’t understand that someone has to pay for all this waste and on top of everything else I pay 20%+ in income tax. For the first time in my life my wife and I are actually considering other countries to retire to. If the 2014 elections don’t set a new direction we won’t make it to 2016 and don’t see any leadership to fix this mess.

tej on March 18, 2014 at 9:36 PM

I suggest you work twice as hard and double your hours so you can stay in place. If that doesn’t work consider cancelling your cable TV and cell phone.

Franklin100 on March 18, 2014 at 10:05 PM

I will vouch for the food increase. With my wife out at her job working with horses, she’s usually too tired to shop for groceries… so I do it.

This past week, I saw a huge jump in prices.

Milk fluctuates at Kroger in my location around $2.59. This past weekend, it went to $3.19 on sale for $2.99. Eggs are normally $1.29, but had jumped to $1.99.

Other prices were the same. Luckily, Aldi’s has held their prices low ($2.59 for milk and $.99 for eggs). I normally get what I can at Aldi’s and only hit Kroger for non-standard items. But I continually track prices week to week and something is definitely up with inflation on food prices lately.

dominigan on March 18, 2014 at 11:38 PM

Time to amp up our chicken flock and get some vegetables growing. It’s true, sometimes home production can be a little more expensive, (and certainly time consuming)but I will feel a lot better knowing I have chicken eggs daily, our fruit trees and garden produce if suddenly food skyrockets even further.

Kristamatic on March 19, 2014 at 9:47 AM

I’m helping organize a 5K for our high school, and we are taking online registrations. I can tell you EXACTLY who has signed up and who has paid. It isn’t rocket science.

ctmom on March 19, 2014 at 10:10 AM

I suggest you work twice as hard and double your hours so you can stay in place. If that doesn’t work consider cancelling your cable TV and cell phone.

Franklin100 on March 18, 2014 at 10:05 PM

Yep, but have been in the workforce for over 30 years and just don’t have it in me to work over 60 hours a week anymore so I am to blame. Actually, my “I won’t make it to 2016″ comment isn’t about the money but the physical heartache watching this country go down this hole and seeing Americans supporting this path. If Obama would resign and lefties would move to the EU I would cancel my cable and cell service today and they can even have my frequent flier miles.

tej on March 19, 2014 at 12:21 PM