Consumer Prices Surge At Fastest Pace In 5 Years As Real Wages Tumble

Tyler Durden's picture

Stagflationary trouble looms.

As prognosticators ohh and aah over the soaring consumer price index (up 2.5% YoY - the most since March 2012), driven by a 14.2% YoY spike in gasoline prices, it appears they missed the fact that real average weekly earnings  plunged by 0.6% YoY - the biggest wage collapse since November 2011.

After Germany and China's inflation-a-palooza, US consumer prices are soaring too. 

Some details from the report:

  • The food index rose 0.1 percent in January, its first increase since April 2016. The index for food away from home rose 0.4 percent, its largest increase since September 2015. The food at home index was unchanged in January after declining in recent months. The index for meats, poultry, fish, and eggs, which had declined for 16 consecutive months, rose 0.7 percent in January as the index for eggs rose 14.3 percent. The index for other food at home also rose in January, increasing 0.2 percent.
  • The energy index rose 4.0 percent in January, its fifth straight increase. The gasoline index continued to rise, increasing 7.8 percent.  The index for natural gas also increased, rising 1.5 percent in January. The index for energy increased 10.8 percent over the past year, with all of its major components rising. The gasoline index rose 20.3 percent, and the index for natural gas increased 10.1 percent.
  • The shelter index rose 0.2 percent in January after increasing 0.3 percent in both November and December. The rent index rose 0.3 percent, and the index for owners' equivalent rent increased 0.2 percent. The apparel index rose in January, increasing 1.4 percent.
  • The index for new vehicles rose 0.9 percent, its largest increase since November 2009.  The index for motor vehicle insurance continued to rise, increasing 0.8 percent in January, and the index for airline fares rose 2.0 percent.  The used cars and trucks index was one of the few to decline in January, falling 0.4 percent after increasing late in 2016.
  • The medical care index also rose in January, increasing 0.2 percent. The indexes for prescription drugs and for hospital services both increased 0.3 percent. The recreation index increased 0.4 percent, the largest advance since January 2012. The index for household furnishings and operations rose 0.3 percent over the month. The alcoholic beverages index increased 0.2 percent, and the indexes for tobacco and for personal care both rose 0.1 percent.

The 0.6% MoM rise is the most since Feb 2013 and 2.5% YoY rise is the highest since March 2012.


Driven by a spike in gasoline prices...

And of course rents and shelter costs, which are now rising at a pace not seen since the last bubble:

This is the biggest MoM spike in Energy prices since June 2009...


But more impoortantly, real wages are collapsing...


Get back to work Mr. Trump.


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Bank_sters's picture

It is all about the exponential function.  Get ready... Just look at what happened when there was a deviation of credit/debt growth in 2009.  


There are numerous stories about the power of doubling that have been passed down throughout history, my favorite is about the game of chess invented by a mathematician. Here, a certain king was so delighted with the game of chess that he decides to reward the inventor with a gift. For his reward the inventor requests that he be paid in a quantity wheat equal to a total sum of wheat placed on the 64 squares of the chessboard, starting with just one grain of wheat on the first square and then doubling this number on each the remaining 63 squares. The king assumes this will add up to a very modest reward and agrees to the inventor’s request. But with the doubling power of two working through the 64 squares on the board, the king soon discovers that the reward is anything but modest. In fact what it adds up to is 500 times the 1976 worldwide harvest of wheat.

LawsofPhysics's picture

Correct.  Time to chase the money-changers from the temple again...

HalinCA's picture

And one more mathematician lost his head ...

jamesmmu's picture

real earning drop 0.4%, no real inflation! stocks to drop

Games Without Frontiers's picture

There's inflation, it's just not in your paycheck if you're a working stiff. Get ready for the Jimmy Carter ankle grab.

hedgeless_horseman's picture

I am partly to blame for this.

I gave one of my employees a lower last week.

He wasn't performing well.

Jason T's picture

monetary ... the credit growth.  

shit productivity due to Obama's regulations help.

chunga's picture

Good morning America, how are ya?

hedgeless_horseman's picture


Say, don't you know me? 

I'm your native son.


BadDog's picture

Followed by massive selling of paper derivatives on the gold and silver markets to suppress prices.  These crooks are so obvious about it now they don't even try to hide it anymore.  Hang 'em.

NugginFuts's picture

and no one has mentioned the 8% drop in mortgage applications either. 

hedgeless_horseman's picture


The first rule of Money Cartel is...

Games Without Frontiers's picture

Gold and silver dumped when CPI comes in hot. In a market where up is down and down is up.

Games Without Frontiers's picture

Short politicians, central bankers and paper scrip.

Fireman's picture

Hyper inflation as in mega blowjob is coming back to the land of "Federal Reserve" fantasy and voodoo Pentacon "economics" built on global industrial slaughter for the profit of the zero 1%. Now comes the time when all that gratuitous anglozionazi carnage built on the psychopathy of Amerikan "exceptionalism" and unemployable drug-addled, uniformed mutants will be paid for and in full. The Ponzi sewer in the Potemkin Village of the chosen racer banksters is about to unleash the greatest tsunami of toxic derivative filth since Fukushima blew its top. Prep now while supplies are still available!

TheytookERjobs's picture

Who would have thought printing a infinite amount of dollars over the last 40 years would one day have consequences 

tbone10's picture

That's that's it pumpkin head burn this mother fucker down with your fucked-up policies you fucking idiot

BigFatUglyBubble's picture

"Get back to work Mr. Trump."

Just dress up in a the diaper and have a sumo match with Rosie O'Donnel.  At least you will be doing something real I.E. Making me amused as I sew the holes closed in my fruit of the looms underwears.

Bill of Rights's picture

The big dark point being overlooked in the CPI report is average hourly earnings.

small axe's picture

all aboard the Stagflation Express!

Going to be fun watching Yellen defend what amount to genocidal polies for a generation of American workers.

Wages down, that's all the Fed cares about, all according to plan.


foodstampbarry's picture

I haven't had a raise in 20 years. NAFTA was one giant fuck you to the American Worker. Mr. Trump, tear that shit deal up. 

LawsofPhysics's picture

The Fed knows that inflation and faith in FIAT are going to be real fucking problems going forward!

wholy1's picture

My mantra remains the same since the genesis of the GreatER Depression, 2008:  STAGFLATION.

moonmac's picture

Wealth and Income disparity in the USA is back to before the Great Depression. The Fed’s goal is to go back to the 1600’s.


P'Od_Accountant's picture

It is long past time to kill all the bankers, lawyers.  Suffer some chaos for awhile, but in the long run we will be better off if we destroy those cocksuckers.  This isnt a racial or religious conflict, but an ownership ideology which dogmatically commoditizes everything, reducing everything to slaves.