Inflation Hot: Consumer Prices Hit New Record High, Up 19% Since 'Bidenomics' Began

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by Tyler Durden
Tuesday, Mar 12, 2024 - 02:40 PM

After January's surprised upside shift, expectations have been adjusted up over the last month for another sizable MoM move in headline CPI. But that was not enough as the 0.4% MoM rise in the headline (as expected - highest since August) lifted CPI YoY up to +3.2% (hotter than the 3.1% exp)...

Source: Bloomberg

The 3-month annualized CPI rate was rose to 2.8% from 1.9%. The 6-month annualized core rate dropped to 3.2% from 3.3%.

Energy costs surged MoM as Core Services inflation slowed MoM...

Source: Bloomberg

Full CPI MoM breakdown:

The index for all items less food and energy rose 0.4 percent in February, as it did the previous month.

  • The shelter index increased 0.4 percent in February and was the largest factor in the monthly increase in the index for all items less food and energy.

  • The index for rent rose 0.5 percent over the month, while the index for owners’ equivalent rent increased 0.4 percent.

  • The lodging away from home index increased 0.1 percent in February, after rising 1.8 percent in January.

  • The airline fares index rose 3.6 percent in February, following a 1.4-percent increase in January.

  • The index for motor vehicle insurance increased 0.9 percent over the month.

  • The medical care index was unchanged in February after rising 0.5 percent in January.

  • The index for hospital services decreased 0.6 percent over the month and the index for physicians’ services decreased 0.2 percent.

  • The prescription drugs index fell 0.1 percent in February.

  • The index for dental services was among those that rose in February, increasing 0.4 percent.

  • The index for personal care fell 0.5 percent in February, following a 0.6-percent increase in January.

  • The household furnishings and operations index fell 0.1 percent over the month, as did the new vehicles index.

  • Among other indexes that rose in February were apparel, recreation, and used cars and trucks.

Full CPI YoY breakdown:

The index for all items less food and energy rose 3.8 percent over the past 12 months.

  • The shelter index increased 5.7 percent over the last year, accounting for roughly two thirds of the total 12-month increase in the core CPI index

    • Feb Shelter inflation: 5.74% down from 6.04% in Jan

    • Feb rent inflation: 5.77%, down from 6.09% in Jan

  • Other indexes with notable increases over the last year include motor vehicle insurance (+20.6 percent), medical care (+1.4 percent), recreation (+2.1 percent), and personal care (+4.2 percent).

Core CPI rose 0.4% MoM (hotter than the +0.3% exp) and up 3.8% YoY (hotter than the +3.7% exp), but still the lowest since April 2021...

Source: Bloomberg

The 3-month annualized Core CPI rate was rose to 4.1% from 3.9%. The 6-month annualized core rate rose to 3.8% from 3.5%.

Core Goods actually rose MoM for the first time since June 2023...

Goods deflation continues (-0.3% YoY) but has flattened out, while services inflation remains stubbornly high at +5.2% YoY...

Source: Bloomberg

And one step deeper - the so-called SuperCore: Core CPI Services Ex-Shelter index - soared 0.5% MoM up to 4.5% YoY - the hottest since May 2023...

Source: Bloomberg

While SuperCore CPI slowed MoM, there was a large jump in Transportation Services MoM...

Source: Bloomberg

Finally, we note that consumer prices have not fallen in a single month since President Biden's term began (July 2022 was the closest with 'unchanged'), which leaves overall prices up 19% since Bidenomics was unleashed. And prices have never been more expensive...

Source: Bloomberg

That is an average of 5.6% per annum (more than triple the 1.9% average per annum rise in price during President Trump's term).

So, about that shrinkflation - did companies only 'get greedy' when Biden took office?

But it gets worse, real wage growth has lagged significantly for the average joe in America...

Source: Bloomberg

Despite a very modest decline in Feb, Food costs are up over 21% since Biden's term began, but non-supervisory wages are up only 18%.

Bidenomics for the win!

Are we going to see a replay on the '70s?

Source: Bloomberg

The market narrative of slow and steady disinflation just broke harder.

...or are we still set for a massive wave of depressionary deflation?