Hot Data: When does CPI reflect a peak?

CPI data came out sizzling hot at 9.1% today: “In the last 12 months, the all-item index has risen 9.1 percent before the season adjustment.This is the highest printing since December 1981.

This 40-year high reflects a massive increase in service, rent, food, but especially energy. The BLS chart above shows how much energy has increased in the last 12 months, driven mostly by gasoline, crude oil and natural gas.

But here’s the thing: This information was collected in June – that is, it is already 14 to 44 days old. And since early June, we know that energy prices have dropped significantly: petrol has fallen 24 days in a row, falling below $ 5 per gallon; Crude oil, which ran at $ 120 last month, is now back below $ 100 – the last print was $ 96.

These have increased significantly from a year ago but as the charts below show, they have decreased by about 20% since last month.

I’m not sure when the data will fully reflect the decline – July (August release), or August (September release) but one would expect these falling prices to show up sooner rather than later.

I no longer have wild cards about CPI Goods But Service.

The data makes it clear that products in general but products in particular have seen the worst of this and prices have started to ease.

On the other hand, services are much harder to pierce. Rent The trend of price increases tends to be sticky, and we’ll soon see how much landlords have set prices after a two-year eviction moratorium and reduced rent demand. And Treatment Cost is another price issue.

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Now we are waiting to see what the Fed does on July 27 + 28 but 75 bps seems to be back. CPI for July 2022 will be published on Wednesday, August 10 …

Previously:
Revise Maximum Inflation (June 29, 2022)

Who is responsible for inflation, 1-15 (June 28, 2022)

Inflation peaks? (May 26, 2022)

Products vs. Services (June 3, 2022)

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