Prices rose 5 percent in May over the past year as recovery continues

[DonViejo]

Source: Washington Post/MSN

The Washington Post

Rachel Siegel 21 mins ago

Prices were up by 5 percent in May compared with a year ago, the largest increase since the Great Recession, continuing a steady climb in inflation even as policymakers insist on staying the course.

Data released Thursday by the Bureau of Labor Statistics showed that prices rose 0.6 percent in the past month. Policymakers have predicted that prices will rise over the coming months, especially compared to a year ago when the economy was still reeling from the pandemic shutdowns.

The most recent crop of inflation figures are unlikely to rattle the Biden administration or Federal Reserve, both of which argue that prices will continue to rise as the economy recovers from the depths of the covid crisis.

The Fed is charged with keeping prices stable and unemployment low. And for now, it is not rushing to control inflation until there’s been substantial progress in the labor market, which is still down 7 million jobs.



Read more: https://www.msn.com/en-us/money/markets/prices-jumped-5-percent-in-may-continuing-inflationary-climb-policymakers-say-it-s-temporary/ar-AAKUgFq

[mahatmakanejeeves]

1. Another link:

ECONOMY

Consumer prices jump 5% in May, fastest pace since the summer of 2008

PUBLISHED THU, JUN 10 2021 8:31 AM EDT UPDATED 2 MIN AGO

Jeff Cox
@JEFF.COX.7528
@JEFFCOXCNBCCOM

{snip}

[mahatmakanejeeves]

2. From the source:

CPI for all items rises 0.6% in May as many indexes increase

In May, the Consumer Price Index for All Urban Consumers rose 0.6 percent (seasonally adjusted); rising 5.0 percent over the last 12 months (not seasonally adjusted). The index for all items less food and energy increased 0.7 percent in May (SA); up 3.8 percent over the year (NSA).

Real average hourly earnings for all employees decrease 0.2% in May

[progree]

7. CPI data series. 3.00% annualized increase since pre-pandemic Feb 2020 high point

Last edited Thu Jun 10, 2021, 03:51 PM - Edit history (1)

CPI Consumer Price Index https://data.bls.gov/timeseries/CUSR0000SA0?output_view=pct_1mth

2019: 252.441 252.969 254.147 255.326 255.371 255.423 255.925 256.118 256.532 257.387 257.989 258.203
2020: 258.687 258.824 257.989 256.192 255.942 257.282 258.604 259.511 260.149 260.462 260.927 261.560
2021: 262.231 263.161 264.793 266.832 268.551

May 2021 compared to May 2019: 268.551/255.371 = 1.0516, or 5.16% over 2 years or about 2.55%/year (see post 22 for the fancy exponentiated way - thanks Mathematic)

May 2021 compared to Feb. 2020: 268.551/258.824 = 1.03758, or 3.76% over 15 months, or about 2.995% or 3.00% annualized. See post #22 for the fancy exponentiated way - thanks Mathematic)

February 2020 was the prepandemic high point of the series. It dropped 1.1 percent over the following 3 months.

CPI percent changes, month over month https://data.bls.gov/timeseries/CUSR0000SA0?output_view=pct_1mth

2019: 0.0 0.2 0.5 0.5 0.0 0.0 0.2 0.1 0.2 0.3 0.2 0.1
2020: 0.2 0.1 -0.3 -0.7 -0.1 0.5 0.5 0.4 0.2 0.1 0.2 0.2
2021: 0.3 0.4 0.6 0.8 0.6

Monthly report: https://www.bls.gov/news.release/cpi.nr0.htm
Calculator at: https://www.bls.gov/data/inflation_calculator.htm

Grocery prices (food at home) inflation compared to overall inflation rate
. . . . . https://www.in2013dollars.com/Food-at-home/price-inflation

[mathematic]

13. Corrected [See below]

Last edited Thu Jun 10, 2021, 03:35 PM - Edit history (1)

You have to do exponents to get the result.


edit: See the below post for the corrected #s

[Bucky]

20. Thank you, Progree and Mathematic for breaking it down.

Given the uneven geographic recoveries going on in the wake of the pandemic (which we're still climbing out of) it's not surprising that transportation and distribution hiccups are creating uneven market demands. That's the majority of what's driving the scattering of inflation around the country.

I expect things will even out over the next few months, as the pandemic continues to recede. But some people are getting hammered by even these minor price increases. It pisses me off how so many states' Republican administrators are just hanging the victims of the recession out to dry.

[progree]

22. Showing that 3.758% over 15 months is 3.00% annualized. And 5.16% over 2 years

is 2.58% annualized:

3.758% over 15 months is 2.995% annualized (rounds to 3.00%):
1.03758^(12/15) = 1.02995 which corresponds to 2.995% annualized. Rounds to 3.00% by a rule that one rounds something ending in "5" up or down to an even digit.

5.16% over 2 years is 2.55% annualized:
1.0516^(1/2) = 1.02548 which corresponds to 2.548% or 2.55%
Check: 1.02548^2 = 1.0516

[mathematic]

23. Oh wow, I need to use my calculator more

I knew the differences looked a little large. I should have doubled checked my input, thanks.

[progree]

24. And thank you. I'll fix my original post #7 in a minute or two /nt

[progree]

26. real avg hourly earnings of production and non-supervisory workers also down 0.2%

https://data.bls.gov/timeseries/CES0500000032
(click link to see graph as well as table)

Monthly real average hourly earnings of production and supervisory workers (also down 0.2% in May from April)
In 1982-1984 dollars (i.e. inflation-adjusted)
2018: 9.21 9.20 9.23 9.23 9.23 9.24 9.26 9.27 9.28 9.27 9.32 9.39
2019: 9.40 9.41 9.39 9.37 9.41 9.43 9.44 9.47 9.48 9.47 9.47 9.47
2020: 9.47 9.50 9.61 10.09 10.04 9.89 9.79 9.80 9.77 9.77 9.79 9.85
2021: 9.82 9.81 9.76 9.76 9.74

May 2021 over May 2019: (9.74/9.41-1)*100% = 3.507% or 3.51%, which comes to 1.74%/year
after inflation.

(1.03507^(1/2)-1)*100% = 1.74%/year

Often happens have a spike upward during and soon after a crash as the first hired first fired get laid off first. Additionally in this pandemic, it was generally poorly paid hospitality industry employees that were disproportionately laid off in large numbers.

Very sharp rise from March to April 2020 (from 9.61 to 10.09), and then drifting generally down ever since, but still above 2 year ago levels.

========================================
Current dollar numbers :
https://data.bls.gov/timeseries/CES0500000008
$25.60 in May 2021

[Aussie105]

3. Common problem here in Australia too.

Prices creeping up.

Supermarket shopping, houses . . . all on the up.

I haven't seen any inflation figures, but I'm guessing they are up.

Fuel though, seems lower than it was pre-pandemic.

[Bucky]

21. No, they're definitely higher than any Trump-years prices

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=m

Under Trump gas prices never got over $3. We just passed $3 in May and they'll be even higher in June.

But you can expect that with any recovery (and with every summer, of course). Gas prices are particularly vulnerable to consumer expectations. Everyone's expecting the economy to pick up, so all factors of production, from labor costs to rents to gas prices are rising. This is why the infrastructure bill is so important. We need to create more jobs so more people can float upwards with the recovery.

[bucolic_frolic]

4. Despite bottoming out, aggregate consumer incomes are flagging and unable to support

higher prices. Many consumers weakened by the last 18 months. So I'm thinking this inflation burst will fade in the months ahead.

[GB_RN]

5. Once Again, Misleading...

Year over year from 2020 is not a valid comparison for pricing for April, May, June…

Dumbass reporters need an education in WTF they are discussing. And for the record, I actually do have an MBA on top of being a nurse, so I do have some knowledge of accounting and economics.

[IronLionZion]

6. Lockdowns eased up pretty fast

so demand increased for all sorts of things from restaurants to retail to travel. It should take some time for production to increase to satisfy this increased demand. Some stuff are involved in global supply chain shortages as other countries are still mired deep in pandemic. And then there are the times it takes to grow crops and raise meat and harvest lumber and other consumer goods that can't bounce back immediately.

[oldsoftie]

18. Yeah, we gave up booking a trip till next year

Everything is crazy high right now

[yaesu]

10. so, will SS payments be increased by 5%? no, I didn't think so, but hey maybe the repukes

controlling the Social Security Administration will find a way of giving Bezos a bonus.

[gab13by13]

12. They already determined our SS increase for this year,

I think it was 1.3%, or close to that.

[George II]

15. It was somewhere around that. I was surprised.

[mathematic]

16. Yes, it will. It's based off of this very BLS inflation report

The headline number is CPI-U, social security payments are adjusted for the very similar CPI-W, also released as part of this report.

Over the past 12 months, CPI-U increased 5%, while CPI-W increased by 5.6%.

The adjustment is actually based on the 3rd quarter number. If we continue to have a 5% inflation rate in the 3rd quarter your social security will be increased by 5% next year.

I have no idea why you think this has anything to do with republicans or jeff bezos.

[hibbing]

11. And my raise for the next fiscal year will most likely be....1.5%

In reality, my salary is worth less every single year.

Peace

[George II]

14. Comparing last May to this May is a little misleading. Last year prices were flat or in some areas..

...were even down with everyone locked up in their homes. Some businesses couldn't give their products away because no one wanted them or could use them.

Looking at the last three years in May might be more informative. The Fed has a 2% target. In 2019 it was slightly lower at 1.7%, last year it was 0%, and this year 5%. That averages out at 2.2% per year, close to the Fed's target.

This is an interesting explanatory graphic from the linked article - "But prices plunged a year ago, making comparisons difficult - prices are not far above where they'd be if they had grown at a steady 2 percent during the pandemic" :

https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AAKUU3U.img?h=768&w=1080&m=6&q=60&o=f&l=f

[progree]

25. May 2021 over May 2019: 2.55%/year. May 2021 over Feb 2020: 3.00% annualized

February 2020 was the pre-pandemic CPI high.

Details post #7

I don't know what this all means, I'll wait a few months to see how things go before buying gold.

[oldsoftie]

17. Inflation is going to be an issue & they better realize it

You cant increase money supply by 3T and not expect it.
Interest rates will HAVE to start rising at some point or we're just barking at the moon.
And it could bite back during the mid-terms

[Cryptoad]

19. Stop the spiral,,,,

Gubermint needs to pay every adult a living wage. If u work and make less, gubermint would make up teh difference!