AIER’s daily price index rose a record 12.8 percent.

After rising 0.5 percent in April, the daily value of AIER rose 2.1 percent in May, rose 3.0 percent in March, and rose 1.3 percent in February. In the first five months of 2022, EPI grew at an annual rate of 20.6 percent. Since a year ago, the daily price index has risen 12.8 percent, the fastest on a 1987 record.

With 19 components, price increases generally tend to be broad-based, with four gains showing a decline and one unchanged in May. Motor fuel prices, which are often a significant driver of monthly changes in the daily price index due to the large weight of the index and the volatility of the underlying product, lead the beneficiaries with a 7.8 percent increase in rice per month (on an over-not-seasonally adjusted basis), contributing 108 basis points to monthly growth. .

Household energy and utilities were the second largest contributors in May, adding 43 basis points, followed by 34-basis-points from home meals and 11-basis-points from away (restaurants). The rest of the contribution was four basis points or less.

The daily price index, including clothing and footwear, a broad measure that includes clothing and footwear, rose 2.0 percent in May after rising 0.4 percent in April, 2.8 percent in March and 1.4 percent in February, contributing to an annual growth rate of 20.0 percent in the first five months of 2022. . Over the past year, the daily price index, including clothing, has risen 12.2 percent, to a 1987 record high.

Clothing prices fell 0.1 percent in May on a seasonally inconsistent basis. Clothing prices fluctuate from month to month. Compared to a year ago, clothing prices rose 5.0 percent.

The consumer price index, which includes daily purchases as well as rare purchases, big-ticket items and contract-based fixed items, rose 1.1 percent on a non-seasonal basis in May. In the last one year, the consumer price index has risen 8.6 percent, the fastest pace since December 1981.

Excluding food and energy, the consumer price index rose 0.6 percent month-on-month (not seasonally adjusted), compared to a 12-month change of 6.0 percent. The 12-month change in core CPI was only 1.3 percent in February 2021 and 2.3 percent before the epidemic in January 2020.

Following the seasonal adjustment, CPI rose 1.0 percent in May from 0.6 percent in the previous month. Among the core, core product prices rose 0.7 percent in May and are up 8.5 percent from a year earlier. Used cars and trucks (1.8 percent), pet food (1.6 percent), motor vehicle parts and equipment (1.5 percent), new cars (1.1 percent), new trucks (1.0 percent) and sports saw significant growth for the month. Product (0.9 percent).

Prices for basic services rose 0.6 percent month-on-month and 5.2 percent a year earlier. Key services, beneficiaries include airfare (12.6 percent per month and 37.8 percent more than a year ago), health insurance (2.0 percent and 13.8 percent more than a year ago), cable and satellite television services (1.3 percent and 5.8 percent) a year Before), other off-home accommodation including hotels (0.9 percent per month and 19.3 percent more than a year ago), car and truck rentals (0.8 percent more than a year ago and 10.4 percent more), and owners’ equivalent rent (which is the CPI’s). Account for 23.8 percent, up 0.6 percent per month and 5.1 percent from a year earlier).

Lack of supply and equipment, logistical and supply chain problems, and labor shortages and turnover increase the price pressures of many goods and services in the economy. Sustainable high price increases are probably distorting economic activity by influencing consumer and business decisions. Moreover, price pressures have resulted in a new Fed tightening cycle, which has increased the risk of policy errors. Also, the unrest surrounding the Russian invasion of Ukraine and the renewed lockdown in China maintains a high level of uncertainty for the economic outlook. Caution is inevitable.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 for over 25 years researching economic and financial markets on Wall Street. Bob previously headed Brown Brothers Harriman’s Global Equity Strategy, where he developed an equity investment strategy that combines top-down macro analysis with bottom-up fundamentals.

Prior to BBH, Bob was a senior equity strategist at State Street Global Markets, a senior economic strategist at Prudential Equity Group, and a senior economist at Citicorp Investment Services and a financial markets analyst. Bob holds an MA in Economics from Fordham University and a BS in Business from Lehigh University.

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