This result is even worse than it looks, thanks to the magic of compounding figures. The consumer-price index shot up 8.3% year on year, according to this morning’s report from the Bureau of Labor Statistics. The month-on-month figure was more cheery at 0.3%, but that also has some additional context:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis after rising 1.2 percent in March, 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.

Increases in the indexes for shelter, food, airline fares, and new vehicles were the largest contributors to the seasonally adjusted all items increase. The food index rose 0.9 percent over the month as the food at home index rose 1.0 percent. The energy index declined in April after rising in recent months. The index for gasoline fell 6.1 percent over the month, offsetting increases in the indexes for natural gas and electricity.

That good news got wiped out over the last week, thanks to the sudden spike in gas prices. Joe Biden’s release from the Strategic Petroleum Reserve likely buffered energy prices temporarily, but only for a very short period. With prices escalating out of sight this month, the May CPI will likely look disastrous … again.

By the way, we can expect a lot of “eased slightly” reporting from the media on this report, as the number declined from March’s 8.5% to April’s 8.3%. Bear in mind, though, that analysts actually expected an 8.1% reading in April in part because of a drop in gasoline prices. And the news from the so-called “core CPI” looks less rosy than the toplines in this report as well. The temporary stall in gas prices helped create the overall 0.3% month-on-month number, which is still higher than most would like to see, especially the Fed. But when you take out food and energy prices, the month-on-month figure looks a lot worse.

In fact, the rate of increase in core CPI doubled from March:

The index for all items less food and energy rose 0.6 percent in April following a 0.3-percent advance in March. Along with indexes for shelter, airline fares, and new vehicles, the indexes for medical care, recreation, and household furnishings and operations all increased in April. The indexes for apparel, communication, and used cars and trucks all declined over the month.

Heather Long also noticed the problem:

This is worrying: So-called "core" inflation (which excludes food and energy) rose more than expected in April.

This is yet another sign that inflation is spreading throughout the economy. It's not just a gas and used car story. https://t.co/dpwLFRarq0

— Heather Long (@byHeatherLong) May 11, 2022

It hasn’t been a gas and used car phenomenon for months, which Long has been very good at documenting all along. That aside appears meant for her colleagues in the media and maybe for the White House. The New York Times takes her hint and offers a straight assessment of the bad news, with the headline, “Consumer prices are still climbing rapidly”:

Inflation, which had climbed by 8.5 percent in the year through March, is beginning to moderate on an annual basis partly because gas prices cooled last month and partly because of a statistical quirk. Increases are now being measured against high price readings from last spring, when inflation started to take off, instead of depressed 2020 levels. The higher base makes annual increases look less severe.

But the so-called core price measure — the one that takes out grocery and gas costs — picked up 0.6 percent in April from the prior month, faster than its 0.3 percent increase in March. That rapid pace of increase suggests that underlying inflation pressures remain strong.

The takeaway from the fresh inflation report is a nuanced one: Inflation may be decelerating from its highest annual peak, but it is still running at around the fastest rate in four decades. The reality that price gains are no longer picking up on an annual basis may be a small dose of good news for Federal Reserve officials, but it is likely to be overshadowed by the reality that policymakers have a long way to go to bring price increases down to more normal and stable levels.

The NYT offer this chart for a historical look at inflation, and just how historically bad it is:

Does that look like inflation is “easing”?

Bear in mind when reading this chart that the measures of inflation changed after the massive inflation spike in the 1970s. If we used the previous formula, we may have been well into double digits by now. There’s also another problem that is embedded into these results, which is the problem of compounding increases. The CPI reporting depends in comparisons both by month and year, but what happens when the basis for comparison was itself significantly inflated?

Take a look at this chart of nominal CPI inflation to see the issue:

The current extraordinary inflationary wave began in April 2021, when year-on-year CPI increased by over 4%. Today’s year-on-year CPI report shows an 8.3% increase on top of that 4%+ increase from a year ago. The 8.3% number is therefore not sufficiently demonstrating the longer-term corrosive effects of inflation. The same problem exists in month-to-month reporting as well, but it’s less pronounced.

To put it simply: inflation is not “easing.” It’s compounding, thanks to the bungling of Joe Biden and his team, who have spent the last year trying to gaslight people into thinking that inflation doesn’t exist, that it’s just “growth,” that it’s “transitory,” and/or that it’s the fault of Vladimir Putin or the GOP. Until the administration comes up with actual coherent policies and strategies to address it — especially in energy policy — we can assume it will continue to compound.

Guess what the Fed will do next, CNBC laments:

Inflation has been the single biggest threat to a recovery that began early in the pandemic and saw the economy in 2021 stage its biggest single-year growth level since 1984. Rising prices at the pump and in grocery stores have been one problem, but inflation has spread beyond those two areas into housing, auto sales and a host of other areas.

Federal Reserve officials have responded to the problem with two interest rate hikes so far this year and pledges of more until inflation comes down to the central bank’s 2% goal. However, Wednesday’s data shows that the Fed has a big job ahead.

The Volcker Option looms … and will likely doom Democrats in 2022 and 2024 when the Fed eventually implements it. Given the incoherence at the White House, they will have little choice.