CPI 0.1% for January, Shelter Inflation is on the Rise

The monthly Consumer Price Index increased 0.1% for January.   CPI measures inflation, or price increases.  While the monthly inflation number seems low, the situation is actually a mixed bag as electricity has it's largest inflation jump since January 2010.  Natural gas costs also ballooned and the cost of sheltering oneself rose dramatically.

 

 

CPI has only increased 1.6% from a year ago as shown in the below graph.  This is still a low annual rate of inflation, although higher than last month.  That said, costs for real people living real lives are seemingly divorced from CPI at this point.  People are stretched to the brink.

 

 

Core inflation, or CPI with all food and energy items removed from the index, increased 0.1% and has increased 1.6% for the last year.  Core CPI is one of the Federal Reserve inflation watch numbers and 2.0% per year is their target rate.   Graphed below is the core inflation change from a year ago

 

 

Core CPI's monthly percentage change is graphed below.

 

core cpi

 

Energy overall jumped up 0.6% for the month and energy costs are now up 2.1% for the entire year.  The BLS separates out all energy costs and puts them together into one index.  This index includes gasoline which dropped -1.0% for the month and has increased only 0.5% for the year.   Yet contained within the energy index is some bad news for consumers.  Natural gas is now up 4.9% from a year ago with a monthly jump of 3.6%.  Electricity has increased 4.4% for the year.  A 4.5% yearly increase in energy services is not good news for consumers and is assuredly taking a big bite out of their already empty wallets.  Shown below is the overall CPI energy index, or all things energy.

 

 

Graphed below is the CPI gasoline index only, which shows the volatility of gas prices.  Gasoline was one of the better pieces of news for this report.

 

 

Core inflation's components include shelter, transportation, medical care and anything not food or energy.  The shelter index is comprised of rent, the equivalent cost of owning a home, hotels and motels.   Shelter increased 0.3% and is up 2.6% for the year.  The cost of housing is clearly jumping up and considering most wages cannot afford a one bedroom apartment in many areas of the country, this is disconcerting.  Rent increased 0.2%, but the cost for home owners increased 0.2% as well.  Hotels and Motels, known as lodging away from home increased 1.3%.  Graphed below is rent, where cost increases hits the people who can least afford it.

 

cpi rent

 

A core inflation cost which almost never drops is medical care.   Medical care went back on the rise and increased 0.3% this month and has increased 2.1% over the last 12 months.  Graphed below is the overall medical care index change from a year ago.

 

CPI Medical index

 

Below is a graph of the medical commodities index, which in large part consists of prescription drug prices, up a whopping 0.6% for month.  Notice the beyond belief never ending increases since 1975.  Television has become unwatchable due to the never ending overpriced, terrible side effects prescription drug ads, yet nothing ever stops the big pharma marketing barrage.

 

CPI Medical commodities

 

Food and beverages overall increased 0.1% and have increased 1.1% from a year ago.  The food at home index, i.e. groceries, had no change for the month.  Food for home is still as it's June 2010 annual lows, up 0.5% for the year..  If you think that sounds like fiction, you're probably right and it is because of how the food index is calculated.  Meats, poultry,
fish,and eggs have all risen 3.3% for the year.   Eating out, or food away from home increased 0.1% from last month and is up 2.0% from a year ago.  Graphed below is the overall food index.

 

 

Graphed below is the food at home index.  CPI does numerous substitutions on food, where if the price of steak increases, they claim hamburger is equivalent.  Substituting one food for another in part explain why you see $7 for some crappy frozen take out at the grocery or milk has become unaffordable, yet the food index rise appears relatively tame.  Clearly the reality is steak is not hamburger.

 

food at home

 

While inflation is tame, shelter is on the rise and this is 32% of monthly expenditures.  Additionally the BLS released real hourly earnings for January.  The hourly real wage increased 0.1% and has increased 0.4% for the year.  This means wages are just barely keeping up with inflation.  For worker bees, those not in management, supervisory roles, real wages increased 0.2% and are up 0.7% for the year.  Yet for production and nonsuperivsory employees, the news is worse.  Due to a 0.3% reduction in hours worked, real wages for the year only increased 0.3%.

CPI details

The DOL/BLS does take yearly surveys on where the money goes in the monthly budget, but as one can see, food and energy are significant amounts of the monthly finances.  Run away costs in these two areas can break the bank, so can food.  Additionally CPI uses substitution, so if flour goes through the roof, somehow we're all just fine with oats and prices didn't really overall increase much. Here is the BLS CPI site, where one can find much more details, information on calculation methods and error margins.

Other CPI report overviews, unrevised, although most graphs are updated, are here.   If you're wondering why the graphs display different figures from the text, the graphs calculate percentages from the index and do not round.  The actual data from the BLS report does round to one decimal place. In other words, 0.05% is rounded to 0.1%.

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Energy independent?

Forbes says because of fracking, natural gas "is inexpensive in cost and abundant in supply". So if fracking is supposed to make the U.S. more energy independent, why is the cost going up so much; because it's being exported?

http://www.forbes.com/sites/christopherskroupa/2014/02/19/fracking-polit...

Why is the cost of shelter also rising; because of private equity buying mortgages in default, renting and flipping?

If the Keystone pipeline is ever approved, will gas at the pump also rise; or because of fracking, it will be "inexpensive in cost and abundant in supply"?

If we mastered nuclear fusion, we'd never be energy independent or have energy that is "inexpensive in cost and abundant in supply" — corporate America will make sure of that, either with a patent, or by some other means.

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CPI

The concept of statistcal analysis is always suspect. As the old saying goes : "... figures never lie; but liars figure" can be applied to the insane idea that in calculating the CPI (Consumer Price Index)  the rising costs of foods and energy are removed from their official statements. Who among us does not need food or energy ? 

There should be accountability in whatever our official government publicly states as factual. The spin-masters must be held accountable and silenced. While the basic human needs of food, shelter (housing), energy (heat & lighting), clothing, clean drinking water, transportation, medicines & healthcare are essential to life, the presiding government persists in twisting the numbers for political reasons; telling the public that things aren't as bad as they really experience in trying to survive. [Who you going to believe - an official statement from the government or what you see and experience with your own lying eyes ?]

We pay the federal government with our tax dollars, should they not be expected to give us truth in return ? As in the case of the official "unemployment rate", with nearly half of the public not employed, the 6 or 7% official statistical statement is a farce; it only counts those who are qualified for and have applied for unemployment insurance - not the actual percentage of people wanting, willing and seeking work.

If releasing truely actual statistics make politicians look bad and the current administration seem inept, --it is because they are !

I believe that with every official governmental release of statistical information, there should at least be a disclaimer as to how the facts were calculated; similar to the requirements placed upon drug manufacturers who must state the side-effects of their product; "... leading to, and possibly causing death."

It's time for transparancy and accountability; if our official government policy is allowed to continue in picking and chooseing which facts are reported and which facts are "too inconvenienient" to release, then why do not speak with authority (as assumed). Their "facts" are "fiction" and do not accurately represent what people are experiencing in reality. A trip to the supermarket will confirm this, if you can afford the gas to get there and back.

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One mother fracker says, "Not in my backyard!"

Exxon CEO Rex Tillerson may be the world's biggest fracker (Exxon is the biggest natural gas producer in the U.S.) but he isn't stupid. He'll frack my backyard and tell me it's good for me and he'll frack your place too, but don't let any frackers near his home. He knows damn well that fracking lowers property values, but he wouldn't admit it until the frackers came to his place. He just joined a lawsuit to stop the fracking because it would lower the value of his property.

http://www.dailykos.com/story/2014/02/21/1279443/-Exxon-CEO-Joins-Lawsui...

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the business of fracking

Yeah, a few "stars" are alerting people to the environmental dangers but they are just railroading this through, including media blitzes due to the huge profits to be made.

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