You’ll be hearing a lot of spin today about how “inflation is moderating”, so a brief post on what it all means may be useful. Karl Denninger helpfully explains, since government stats are often meant to obfuscate rather than inform. The takeway is that “core inflation is smoking hot”—that’s the smell:
I highlight here the “gorillas in the room”. There’s more discussion at the link:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis after rising 1.2 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.3 percent before seasonal adjustment.
The 900lb Gorilla in the room is the food index, which was up 0.9% on the month, and 1% for food at home. Much worse, all items less food and energy was up 0.6% which was double the same index for last month. This is the much-watched "core" inflation number and it is smoking hot, as I expected to both occur and continue since while everyone loves to claim fuel is "transitory" it matters not what you think since everything moves by truck for the last miles, and often for all the miles. Stick diesel north of $5, in some places materially so, and the price of literally everything rises.
A lot.
Food is up 9.4% for the last 12 months, a figure last eclipsed in April 1981.
And more on diesel, which we’ve been pointing at recently:
The other Gorilla in the room, fuel oil aka diesel fuel, is up 80% from last year. Until and unless that is stopped, which will only be stopped when the government ceases its war on fossil fuels, there is no way for that upward pressure to be reversed. Every piece of farm equipment forward to the delivery of the food to your store runs on diesel. Every single item you buy travels at least the last part of its journey moved by diesel. I do not care how you "feel" about the issues related to the use of fossil fuels, the simply reality is that without them you have no fertilizer, no food and nothing in the store so all of the claims of virtue you issue will make you broke.
Isn’t fascinating how liberals like to pretend that reality doesn’t apply to them, and then when it reaches out and slaps them upside the head, it’s always “unexpected”!
Diesel $6 a gallon in Delaware