CPI Up .8% in Nov. on Higher Prices for Food, Fuel, Shelter, Vehicles, and Airfare; Inflation at a 39 Year High
Blogger and Commenter RJS, MarketWatch 666, November’s consumer prices, October’s trade deficit, wholesale sales, and JOLTS
The consumer price index rose 0.8% in November, as higher prices for food, energy, new and used vehicles, airline fares, and toys were only slightly offset by lower prices for information technology devices, hospital services and for vehicle insurance….the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.8% higher in October, after rising by 0.9% in October, by 0.4% in September, by 0.3% in August, by 0.5% in July, by 0.9% in June, by 0.6% in May, by 0.8% in April. by 0.6% in March, 0.4% in February, 0.3% in January, 0.2% in December, and by 0.2% last November…the unadjusted CPI-U index, which was originally set with prices of the 1982 to 1984 period equal to 100, rose from 276.589 in October to 277.948 in November, which left it statistically 6.809% higher than the index reading of October of last year, which is reported as a 6.8% year over year increase, up from the 6.2% year over year increase reported a month ago, and the greatest one year price increase since June 1982 . . . with higher food and energy prices leading the overall index increase, seasonally adjusted core prices, which exclude food and energy, were up by 0.5% for the month, as the unadjusted core price index rose from 281.617 to 282.754, which left the core index 4.9285% ahead of its year ago reading of 269.473, which is reported as a 4.9% year over year increase, up from the 4.6% year over year core price increase that was reported in October…
The volatile seasonally adjusted energy price index rose 3.5% in November, after rising by 4.8% in October, by1.3% in September, 2.0% in August, 1.6% in July, by 1.5% in June, being unchanged in May, falling by 0.1% in April, rising by 5.0% in March, by 3.9% in February, by 3.5% in January, by 2.6% in December, and by 0.7% last November, and is now 33.3% higher than in November of a year ago . . . the price index for energy commodities was 5.9% higher in November, while the price index for energy services was 0.3% higher, after rising 3.0% in October . . . the energy commodity index was up 5.9% on a 6.1% increase in the price of gasoline, and a 3.5% increase in the price of fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 0.1% higher…within energy services, the price index for utility gas service rose 0.6% after rising 6.6% in October and is now 28.1% higher than it was a year ago, while the electricity price index rose 0.3% in November after rising 1.8% in October . . . energy commodities are now averaging 57.5% higher than their year ago levels, with gasoline prices averaging 58.1% higher than they were a year ago, while the energy services price index is now up 10.7% from last November, as electricity prices are still 6.5% higher than a year ago…
Meanwhile, the seasonally adjusted food price index rose 0.7% in November, after rising by 0.9% in October, by 0.9% in September, by 0.4% in August, 0.7% in July, by 0.8% in June, by 0.4% in May, by 0.4% in April, by 0.1% in March, by 0.2% in February, by 0.1% in January and by 0.3% in December, and after being unchanged last November, as the price index for food purchased for use at home was 0.8% higher in November, after rising 1.2% in October, while the index for food bought to eat away from home was 0.6% higher, as average prices at fast food outlets rose 1.0% and average prices at full service restaurants rose 0.4%, while food prices at employee sites and schools averaged 5.5% lower…
In the food at home categories, the price index for cereals and bakery products was 1.3% higher, as average bread prices rose 1.2%, the price index for rice rose 1.5%, the price index for fresh sweetrolls, coffeecakes, doughnuts rose 3.5%, and the price index for flour and prepared flour mixes rose 1.8% . . . at the same time, the price index for the meats, poultry, fish, and eggs food group was 0.9% higher even as egg prices fell 2.7%, as the price index for beef and veal rose 0.9%, the price index for pork rose 2.2%, the price index for chicken rose 1.4%, and the price index for frozen fish and seafood rose 3.1%….in addition, the seasonally adjusted price index for dairy products was 0.2% higher, as milk prices rose 0.9%, more than offsetting a 2.0% decrease in the price index for ice cream and related products…moreover, the fruits and vegetables price index was 1.0% higher, as the price index for fresh fruits rose 2.2%, the price index for canned vegetables rose 1.0%, and the price index for dried beans, peas, and lentils rose 3.1% . . . meanwhile, the beverages price index was 0.2% higher, as the price index for carbonated drinks rose 1.4%, the price index for noncarbonated juices and drinks fell 0.4%, and the price index for coffee rose 1.1% . . . lastly, the price index for the ‘other foods at home’ category rose 1.0%, as the price index for sugar and sweets rose 1.3%, the price index for fats and oils including peanut butter but not butter or margarine rose 2.3%, the price index for frozen and freeze dried prepared foods rose 1.6%, the price index for salt and other seasonings and spices rose 3.1%, and the price index for snacks was 1.6% higher….
The itemized list for price changes of over 100 separate food items is included at the beginning of Table 2 for this release, which also gives us a line item breakdown for prices of more than 200 CPI items overall . . . since last November, the price index for uncooked beef steaks is up 24.6%, the price index for uncooked beef roasts is up 26.4%, the price index for ground beef is up 13.9%, the price index for other beef and veal is up 24.2%, the price index for bacon and related products is up 17.8%, the price index for ham is up 11.7%, the price index for pork chops is up 12.8%, the price index for “other pork including roasts, steaks, and ribs” is up 22.9%, the price index for fresh and frozen chicken parts is up 10.7%, the price index for fresh fish and seafood is up 10.7%, and the price index for ‘other fats and oils including peanut butter’ but not butter or margarine is up 12.9%, while the price of food at employee sites and schools has fallen 44.9% over the past year, on a 58.6% drop in food prices at elementary and secondary schools…
Among the seasonally adjusted core components of the CPI, which rose by 0.5% in November after rising by 0.6% in October, by 0.2% in September, by 0.1% in August, by 0.3% in July, by 0.9% in June, by 0.7% in May, 0.9% in April, 0.3% in March, and by 0.1% in February, after being unchanged in January and December, and after rising by 0.2% in November of last year, the composite price index of all goods less food and energy goods was 0.9% higher in November, while the more heavily weighted composite for all services less energy services rose 0.4%….
Among the goods components, which will be used by the Bureau of Economic Analysis to adjust October retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.7% higher, as the price index for floor coverings rose 3.1%, the price index for living room, kitchen, and dining room furniture rose 0.9%, the price index for major appliances rose 2.4%. the price index for clocks, lamps, and decorator items rose 1.3%, the price index for outdoor equipment and supplies rose 1.1%, and the price index for indoor plants and flowers rose 2.0%….at the same time, the apparel price index was 1.3% higher on a 6.7% increase in the price index for men’s suits, sport coats, and outerwear, a 2.2% increase in the price index for men’ shirts and sweaters, a 2.2% increase in the price index for women’s suits and separates, and a 3.0% increase in the price index for boys’ apparel . . . meanwhile, the price index for transportation commodities other than fuel was 1.7% higher, as prices for new cars were 1.1% higher, prices for new trucks rose 1.4%, prices for used cars and trucks were 2.5% higher, tire prices were 1.3% higher, and the price index for parts and equipment other than tires rose 1.4% . . . in addition, the price index for medical care commodities was 0.1% higher. as prescription drug prices rose 0.3% and nonprescription drug prices rose 0.2%, while the price index for medical equipment and supplies was 0.4% lower . . . in addition, the recreational commodities index was 0.3% higher despite a 1.4% decrease in TV prices, as the price index for other video equipment rose 1.7%, the price index for toys, games, hobbies and playground equipment rose 1.7%, and the price index for sporting goods including bicycles rose 0.8%…on the other hand, the education and communication commodities index was 1.0% lower on a 0.8% decrease in the price index for smartphones, a 1.3% decrease in the price index for computers, peripherals, and smart home assistants, and a 1.4% decrease in the price index for computer software and accessories, and a 0.9% decrease in the price index for college textbooks . . . lastly, a separate price index for alcoholic beverages was unchanged, while the price index for ‘other goods’ was 0.3% higher on a 0.9% increase in the price index for cigarettes and a 1.9% increase in the price index for stationery, stationery supplies, and gift wrap…
Within core services, the price index for shelter was 0.5% higher as rents rose 0.5% and homeowner’s equivalent rent was 0.4% higher, and as prices for lodging away from home at hotels and motels rose 2.9%, while at the same time the shelter sub-index for water, sewers and trash collection was unchanged, while the index for other household operation costs was on average 1.1% higher, on a 1.5% increase in the price index for domestic services . . . in addition, the price index for medical care services was 0.3% higher, as the price index for physicians services rose 0.4% and the price index for health insurance rose 1.7% . . . at the same time, the transportation services price index was 0.7% higher, as the price index for car and truck rentals rose 1.1%, the price index for vehicle body work rose 1.0%, the price index for airline fares rose 4.7%, and the price index for intracity mass transit rose 1.0% . . . on the other hand, the recreation services price index fell 0.5% as the price index for video discs rentals and other media services fell 1.8% and the price index for admissions to sporting events fell 4.8% . . . meanwhile, the index for education and communication services was unchanged as the price index for day care and preschool tuitions rose 0.3% and the price index for delivery services rose 0.4%, while the price index for internet services and electronic information provider fell 0.5% . . . lastly, the index for other personal services was 0.1% higher as the price index for financial services was 0.5% higher and the price index for laundry and dry cleaning services was 0.9% higher…
Among core line items, the price index for car and truck rental, which is still 37.2% higher than a year ago, the price index for used car and trucks, which is now up 31.4% from a year ago, the price index for new cars, which has risen 10.9% in the same span, the price index for new trucks, which is up 11.2% since last November, the price index for tires, which is up 11.1% over the same period, the price index for lodging away from home including at hotels and motels, which has still risen 25.5% from a year ago, the price index for domestic services, which has risen 10.2% year over year, the price index for living room, kitchen, and dining room furniture, which is now up 14.1% over the last 12 months, the price index for linens other than window coverings, which has risen 10.7% since last November, and the price index for men’s suits, sport coats, and outerwear, which is up 14.1% from a year ago, have all seen prices rise by more than 10% over the past year, while the price index for telephone hardware, calculators, and other consumer information items, which is now down by 11.5% since last November, and the price index for smartphones, which has fallen 16.0% from a year ago, are the only core line items to have decreased in price by a double digit magnitude over that one year span…
I admit to being mystified why data is showing increased gasoline prices. Crude oil prices peaked in mid-October and fell a lot since. Retail gasoline prices where I am did not go up at all in November and are now lower, and I know of nowhere anybody I know saw them go up. Yet here they are being reported as a major element of price increases in November.
Anybody out there got an explanation for this? As it is, it looks like they are definitely going down for December, so expect November to the last month of all this record seting inflation.
Around $3.10/Gallon at least at Costco in South Lyon. Detroit add 39 cents. From there and heading west we experienced increasing prices. Denver was substantially higher. We arrived in Phoenix 3 months ago when it was $3.39 and sometimes could capture $3.29. From then it went up to $3.75 – $3.79 with Shell being higher. In Park Ridge, IL we saw $4.00/gallon at one station (Arco) which probably did not want any business as everyone else was bobbing around $3.60.
It has not gone down around us.
Ya got to love food monopolies and vertical integration.
Drop in egg prices is surprising with the narrative that Americans are buying more. Dried egg powder is a processed food item in “just add water” baking and pancake mix and the demand is essentially the same as it has been, so maybe uptick in supply? Not likely. Laying hens have to age out to 6 months before first egg. To get quantity 8 or 9 months. So they magically can’t just turn on the egg machine.
Let talk about those meat prices and how they are, again, not supported by by any logically driven market indicators.
Pork – declined 1% from 52.4 pounds per Capita in 2019 versus 2021 year end forecast of 51.6
Chicken – increase of 1% with 112.5 pound per Capita in 2019 versus 114 forecast for 2021
Beef – last week’s slaughter report has us as at 664,000 units for November 2021. November 2020 w were at 668,000, so essentially flat.
Out of the three, pork and chicken are vertically integrated by the processors. The third, cattle, is still not vertical but has been moving into contract grower territory. Since the amount of land required to support the cattle industry, the processors are having issues putting their arms around the market. That being said, prices can not be squeezed as easily because of that. Contract growers still have to buy from outside sale barns to meet their imposed quotas to get paid. Failure to meet contract obligations = forfeiture of payment or they might have to eat the inflow cost from the stockyards. Meaning the prices the finishers have to pay for heads of cattle they are short from other ranchers.
Corn prices are still somewhat high but not crazy, soy beans have calmed since the likelihood of Build Back Better actually passing is low and without the biofuels provisions there is no additional current demand. All other commodity crops are at flat year over year, slightly higher, or lower such as wheat.
egg prices are notoriously volatile, Michael; it would not surprise me to see them reverse completely with the next report…also remember that the CPI reflects average consumer prices, determined by actual grocery store visits by Census workers across the country…..in a little over 6 hours we’ll be getting producer prices; there we’ll see what egg prices are at wholesale and at the farm gate; those could be quite different than the change in the CPI index for eggs….we’ll also see the month over month change in margins at food retailers, also a surprisingly volatile number, although there’d be no way of pulling retail profits on eggs out of that number..
i should change this phrase “what egg prices are at wholesale and at the farm gate” to reflect that we won’t be seeing actual prices, but rather the month over month change in the index for each item….none of these reports indicates prices, they’re all based on an index that typically reflects average 1982 to 1984 prices as being equal to 100, and builds from there….that’s done that way so they can be used as deflators in national income and product reports, facilitating computation of the changes in such metrics as real wages and real goods and services output…
This is all interesting to me. Most growers/producers are contract based each year. Where they run into free market is if they had issues meeting the obligations. There might be some other items but most costs are fixed. I use the free market for both input side and farmgate side. The prices for feed, mineral, etc. Haven’t really really gone up. Tractor Supply and Nutrena are getting nafarious but the Producers Co-op which makes all of the feed in Bryan, TX hasn’t had anything anything more than maybe a few quarters uptick in feed bag prices due to corn market. From a production and slaughter perspective it just looks like wholesale and retail interests are being, ahem, rediculous. We raised prices because the large retail chain HEB is selling a dozen pastured eggs at $6.49 a dozen. We had been at $5 for a couple of years and only recently went to $6. (I’m not into price gouging but to compete with em, join em?)
Thanks for the info, we will see more as data comes in.