The BLS released the CPI for August and inflation is moving up again and we’re not surprised. With the price of oil climbing, millions of boomers retiring, potential worker strikes and huge raises, and supply chains restructuring there was bound to be ongoing chaos with inflation.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.6 percent in August on a seasonally adjusted basis, after increasing 0.2 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.7 percent before seasonal adjustment. The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase. Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month.
The energy index rose 5.6 percent in August as all the major energy component indexes increased. The food index increased 0.2 percent in August, as it did in July. The index for food at home increased 0.2 percent over the month while the index for food away from home rose 0.3 percent in August. The index for all items less food and energy rose 0.3 percent in August, following a 0.2-percent increase in July. Indexes which increased in August include rent, owners’ equivalent rent, motor vehicle insurance, medical care, and personal care.
The indexes for lodging away from home, used cars and trucks, and recreation were among those that decreased over the month. The all items index increased 3.7 percent for the 12 months ending August, a larger increase than the 3.2-percent increase for the 12 months ending in July. The all items less food and energy index rose 4.3 percent over the last 12 months. The energy index decreased 3.6 percent for the 12 months ending August, and the food index increased 4.3 percent over the last year.
Source: BLS.gov
The Fed meets next week and most are expecting no changes to central bank rate policy but we’re not so sure given that the oil price increase has not yet permeated throughout the economy so we expect inflation to rise higher again in September’s report. In any event, this data does not suggest a pivot/cut anytime soon.
What are we investing right now? We continue to accumulate T-Bills and milk the Devon cash cow and wait for the market to correct so stay tuned, stay profitable and stay solvent…