Despite all of the happy talk from Joe Biden and the White House about the economy, inflation not only hasn’t abated — it’s still soaring. The consumer price index went up a full point month on month in May, and rose to 8.6% year-on-year. That doesn’t take into account that the May 2021 basis for today’s report had already begun showing inflation in the 5% range:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.0 percent in May on a seasonally adjusted basis after rising 0.3 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.6 percent before seasonal adjustment.
The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors. After declining in April, the energy index rose 3.9 percent over the month with the gasoline index rising 4.1 percent and the other major component indexes also increasing. The food index rose 1.2 percent in May as the food at home index increased 1.4 percent.
Gas price increases contributed to May’s spike, but it doesn’t fully explain it either. The so-called core CPI rate, without food and energy prices, rose 0.6% month on month, extrapolating out to 7.2% inflation on its own:
The index for all items less food and energy rose 0.6 percent in May, the same increase as in April. While almost all major components increased over the month, the largest contributors were the indexes for shelter, airline fares, used cars and trucks, and new vehicles. The indexes for medical care, household furnishings and operations, recreation, and apparel also increased in May.
The Bureau of Labor Statistics offers this handy chart to demonstrate clearly that we have not turned a corner on inflation:
And, as Heather Long notes, it actually more looks like it’s accelerating:
This is worrying: Inflation rose 1% in May alone. There's just not much sign of a slowdown. If anything, inflation is picking up in a lot of categories (even beyond energy)
Jan: 0.6% pic.twitter.com/5TS8bn41GI
— Heather Long (@byHeatherLong) June 10, 2022
Let’s take a look at the categories to see what Long means. These are all month-on-month increases:
- Food at home: 1.4%
- Food away from home: 0.7%
- Gasoline: 4.1%
- Electricity: 1.3%
- Utility gas: 8.0%
- Used cars/trucks: 1.8%
- Apparel: 0.7%
- Shelter: 0.6%
Inflation is hammering American households across all categories, especially in their most vital needs — food, shelter, and energy.
CNBC’s Jeff Cox notes that this is the worst CPI report in over 40 years:
Inflation accelerated further in May, with prices rising 8.6% from a year ago for the fastest increase since December 1981, the Bureau of Labor Statistics reported Friday.
The consumer price index, a wide-ranging measure of goods and services prices, increased even more than the 8.3% Dow Jones estimate. Excluding volatile food and energy prices, so-called core CPI was up 6%, slightly higher than the 5.9% estimate. …
Those escalating prices meant workers took another pay cut during the month. Real wages when accounting for inflation fell 0.6% in April, even though average hourly earnings rose 0.3%. On a 12-month basis, real average hourly earnings were down 3%.
That data also came from the BLS in a separate report today. Real average weekly earnings also dropped 0.7% in May, despite no change in workweek hours. However, workweek hours dropped 0.9% year-on-year, which means that real average weekly earnings year-on-year have dropped 3.9%.
This is what the American worker has seen for the past year under Bidenflation:
In this environment, how much interest do Democrats think voters will have in the J6 committee? In abortion politics? In climate change? Workers have only had two months out of the past thirteen with any real wage gains. That’s the “incredible transition” that will be on their minds every day between now and the midterms.
Update: Heather Long offers the year-on-year category increases, which are spectacular for all the wrong reasons:
Groceries +11.9% y/y –>Biggest inc. since 1979
Chicken +17.4% ->Largest ever
Restaurants +9% -> Largest ever
Fuel oil +107% ->Largest ever
Electricity +12% ->Largest since '06
Rent +5.2% ->Largest since 1987
Airfare +37.8% ->Largest since 1980
Services +5.7% ->Largest since 1990
— Heather Long (@byHeatherLong) June 10, 2022
Don’t forget that these won’t come down after inflation levels off, unless we have a sudden depression. It will take years for wages to catch up to the gaps that this round of hyperinflation have created.