BLS Report: Year-to-Year Inflation Running at a 40-YEAR HIGH

(CNSNews.com) – The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in January on a seasonally adjusted basis, more than December’s 0.5 percent monthly increase, the U.S. Bureau of Labor Statistics reported today.

Over the last 12 months, the all-items index increased 7.5 percent before seasonal adjustment, higher than the 7.3 percent year-to-year increase analysts were expecting and the biggest such increase since February 1982, 40 years ago.

January’s 7.3 percent year-to-year increase was higher than the annual +7.1 percent recorded for the 12 months ending in December 2021.

The all items less food and energy index rose 6.0 percent in January, the largest 12-month hike since the period ending August 1982. The energy index rose 27.0 percent over the last year, and the food index increased 7.0 percent.

Increases in the indexes for food, electricity, and shelter were the largest contributors to the seasonally adjusted all items increase. The food index rose 0.9 percent in January following a 0.5-percent increase in December. The energy index also increased 0.9 percent over the month, with an increase in the electricity index being partially offset by declines in the gasoline index and the natural gas index.

WH will be looking at ‘recent trends in inflation’

At the White House on Wednesday, spokeswoman Jen Psaki said the Biden administration will be looking at “recent trends in inflation.”

“So in November and December, price increases…slowed relative to the month before, and in January, they were down almost half from where they were in October. That’s a sign of progress that the inflationary increases are increased — decreasing, I should say, month-to-month.

“And we’ll be looking at…wage growth compared to inflation in January as well.”

But, Psaki admitted, “We do…expect a high year-over-year inflation rate reading in tomorrow’s data, given what we know about the last year, right? And what we’ve seen over the last year. That’s because year-over-year data largely reflects the price increases over the last year, as we’ve already talked about and we know about.

“It’s not about the most recent trends, which I think is the important component for people to look at, right? There’s monthly and then there’s also the annual data. So above seven percent, as I think some are predicting, would not be a surprise, even though we don’t know what the data is going to be.”

She noted that “outside forecasters continue to project that inflation is expected to decrease over the course and moderate over the course of this year.”

Note: According to BLS, the Consumer Price Index (CPI) measures the change in prices paid by consumers in two populations groups for goods and services — food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living.

The two population groups are “all urban consumers” and “urban wage earners and clerical workers.” The all-urban consumer group represents about 93 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people, as well as urban wage earners and clerical workers.

(Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, farming families, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals.)

The Consumer Price Index for “Urban Wage Earners and Clerical Workers” (CPI-W) represents about 29 percent of the total U.S. population and is a subset of the CPI-U population. CPI-W is based on the expenditures of households included in the CPI-U group that meet two requirements: more than one-half of the household’s income must come from clerical or wage occupations, and at least one of the household’s earners must have been employed for at least 37 weeks during the previous 12 months.

Prices are collected each month in 75 urban areas across the country from about 6,000 housing units and approximately 22,000 retail establishments (department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments). Taxes are included in the index.

Prices of fuels and a few other items are obtained every month in all 75 locations. Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visits or telephone calls by the Bureau’s trained representatives.

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