The latest seasonally adjusted inflation rate for January was 0.8% month over month. The non-seasonally adjusted annual rate came in at 7.87%. Both of these numbers were slightly above expectations.
Unlike last year, where one component made up the bulk of the move, the past several months have shown increases more evenly spread across the CPI. This shows that inflation continues to become more widespread. And there is no sign it is slowing down.
The Consumer Price Index data for February just came out. It was smoking hot yet again with prices up 0.8% month-on-month and 7.9% on an annual basis. Keep in mind, this was before the big spike in oil prices due to the Russian invasion of Ukraine.
And inflation is even worse than the official government numbers suggest.
St. Louis Federal Reserve President James Bullard unwittingly let the cat out of the bag and revealed the central bank doesn’t have the stomach to do what’s necessary to take on surging, persistent inflation.
Federal Reserve Chairman Jerome Powell “retired” the word “transitory” as it relates to inflation back on Nov. 30. Just two-and-a-half months later, we’re seeing a new word bandied about to describe inflation — persistent.
Less than a week after the January CPI data came in even hotter than anticipated (again), we got yet another signal that persistent is a much better word for the inflation situation. Producer prices (PPI) doubled expectations, charting the biggest increase in eight months.
After CPI came in hotter than expected yet again in January, Peter Schiff appeared on Fox Business along with Chief Investment Officer and Portfolio Manager of Solutions Funds Group Larry Shover. Peter said that the inflation tsunami is just getting started and the Fed is powerless to fight it.
The Federal Reserve still seems to be hoping that inflation will just go away on its own or that it can jawbone it down by projecting a few little rate hikes. But the Consumer Price Index data keeps dashing its hopes. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the January CPI and the Fed’s proposed “fight” against inflation. He also discusses the demand forecast for silver this year.
The latest seasonally adjusted inflation rate for January was 0.65% month over month, with a non-seasonally adjusted annual rate of 7.48%. Both of these numbers came in above expectations.
As hypothesized last month, it was very possible that Omicron temporarily restrained inflation in December and a rebound should be expected. It did not take long for the rebound to occur!
January showed very strong growth with 467k new jobs reported by the BLS. This crushed expectations of 150k. Some analysts even projected a contraction given the reported loss by ADP on Wednesday.
However, the bigger story is the revisions of prior months. October to December saw upward revisions of nearly 900k jobs! The story is more complex though. The BLS has updated their models to “smooth” out the job numbers for seasonality. Most of these “new” gains were pulled from job reports last summer (more on this below).
December Consumer Price Index data came out on Wednesday (Jan. 12). Month-on-month, it was again even hotter than expected. Peter called it an inflationary freight train that the Fed’s “field of dreams” monetary policy will not stop.
“Transitory” inflation has now been running hot for a full year.
The producer price index rose at the fastest rate in the history of the data set in November. This is a runaway inflation train hurtling down the tracks toward consumers. And despite all the talk, the Fed won’t be able to stop it.
