Consumer prices surge again, CPI shows, and push U.S. inflation rate to 8.6%

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Rideback
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Re: Consumer prices surge again, CPI shows, and push U.S. inflation rate to 8.6%

Post by Rideback »

Two big dogs means the milk bone bill is worth checking for pricing.

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PAL
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Re: Consumer prices surge again, CPI shows, and push U.S. inflation rate to 8.6%

Post by PAL »

I am so sorry you have been reduced to eating Milk Bones, but they probably have good fiber and are good for your teeth.
Thriftway prices in general seem to be higher than Hanks, except for Best Foods Mayo. Half the price of Hanks. Now it won't be if they see this post!
Pearl Cherrington
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Re: Consumer prices surge again, CPI shows, and push U.S. inflation rate to 8.6%

Post by Rideback »

Personal experience. I stopped by Ulrich's to pick up some necessities then checked the pricing on Amazon. Ulrich's was $10 for one item which on Amazon was $13, only difference was that Amazon's had 2x the size for the $13!

Priced 3 items at Thriftway. Box of 24 oz Milk Bones was $7.99. On Amazon a 10# box was $14.95.
A box of tapioca was $2.15 at Thriftway and $1.99 at Hank's. Amazon was $1.24
A bag of walnuts was $14 at Thriftway and Hank's and Amazon had a bag 3x the size for $22

All of them Amazon items are shipped free. Color me skeptical that there isn't more than the 8.6% inflation happening here in the valley.
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mister_coffee
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Re: Consumer prices surge again, CPI shows, and push U.S. inflation rate to 8.6%

Post by mister_coffee »

It is important to keep in mind that there are no simple, short-term fixes for these problems.

Really two things are driving high inflation right now. The first is the continuing supply-chain problems from the pandemic, and the second is a global fuels crunch, partially caused by the Ukraine War.

There isn't any magic wand at all for the first problem, just a lot of individual things that are all pretty unglamorous, from finally developing even better vaccines and distributing them worldwide, to reshoring some critical production facilities, to modernizing both our port facilities and the processes we use for moving goods through them. All of those things will take time.

On the fuels crunch, the real only long-term solution is to transition away from fossil fuels. Which again will take time. Although one has to wonder at this point how quickly we could move with a WWII-style all-out effort. Like, would it be possible to electrify 25 percent of our personal vehicles in five years? What would it take to accomplish that? My own suspicion is that while it is probably both technically and economically possible, our current political situation would make the consensus required to push something like that forward pretty hopeless.
:arrow: David Bonn :idea:
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Re: Consumer prices surge again, CPI shows, and push U.S. inflation rate to 8.6%

Post by PAL »

Good articles. What does this say about our capitalistic system and the fallacy of continued growth. They want us to keep spending to keep the economy rolling but people have to cut back because of high prices.
I am very fortunate that the inflation is not hitting my husband and I very hard. We have both been through a high inflationary time, as the article says in 1981. I felt it then. I was single and my wage was not keeping up then.
Now, I can limit my driving, even here it the Valley. Just go to town once a week, like we did with Covid or not even that often.
But for those that have to drive to work, that is a hardship here. Instead of subsidizing the gas companies and corporations, those workers need a gas fund. And try not to drive a gas guzzling vehicle unless it is necessary for their job.
Since our Valley is a tourist economy, people are still coming here to shop and buy artwork, jewelry, etc. I see it in Winthrop when I am up there.
What goes up, must come down, right? How will it land?
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pasayten
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Consumer prices surge again, CPI shows, and push U.S. inflation rate to 8.6%

Post by pasayten »

Consumer prices surge again, CPI shows, and push U.S. inflation rate to 8.6%
Last Updated: June 10, 2022 at 8:37 a.m. ET
By Jeffry BartashFollow

The numbers: The cost of living jumped 1% in May on the back of higher rents, gas and food prices, keeping the rate of U.S. inflation at a 40-year high.

The increase in the consumer price index in May was more than triple the gain in the prior month. Economists polled by The Wall Street Journal had forecast a 0.7% advance.

The increase in inflation over the past year moved up to 8.6% from 8.3%, a new cycle high. The last time inflation rose as rapidly was in 1981.

The so-called core rate of inflation, which omits food and energy, rose by 0.6%, a tick higher than expected.

The increase in the core rate over the past year slowed to 6% from 6.2%.

The Federal Reserve views the core rate as a more accurate measure of price trends, but the higher cost of gas and food have generated much of the public and political outcry about inflation.

Rising food and energy prices also add to the costs of doing business for many companies ranging from grocers and restaurants to airlines and fertilizer producers. And they’re passing those costs onto consumers.

Big picture: The surge in inflation has shown little sign of cresting.

Gas prices have jumped again to record highs. Food costs keep climbing. And rents have also risen sharply. Prices are likely to show another big increase in June.

The Fed is raising interest rates to try to slow the economy and tame inflation, but it will take time.

The sharp increase in prices in May, and another likely strong reading in June, is sure to keep pressure on the Fed to stay aggressive. Speculation about a rate-hike “pause” in the fall looks farfetched.

What does that mean for consumers? They’ll have to keep paying higher prices, but their incomes aren’t growing fast enough to keep up. The longer that goes on the more strain it will place on American households and hurt the economy.

The Dow Jones Industrial Average DJIA, -1.94% and S&P 500 SPX, -2.38% were set to open mixed in Friday trades. The 10-year bond yield TMUBMUSD10Y, 3.045% was flat.

High cpi if it continues will mean a high COLA for social security for 2023...
What is a COLA?
Legislation enacted in 1973 provides for cost-of-living adjustments, or COLAs. With COLAs, Social Security and Supplemental Security Income (SSI) benefits keep pace with inflation.

Latest COLA
The latest COLA is 5.9 percent for Social Security benefits and SSI payments. Social Security benefits will increase by 5.9 percent beginning with the December 2021 benefits, which are payable in January 2022. Federal SSI payment levels will also increase by 5.9 percent effective for payments made for January 2022. Because the normal SSI payment date is the first of the month and January 1 is a holiday, the SSI payments for January are always made at the end of the previous December.

How is a COLA calculated?
The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

A COLA effective for December of the current year is equal to the percentage increase (if any) in the CPI-W from the average for the third quarter of the current year to the average for the third quarter of the last year in which a COLA became effective. If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA for the year.

COLA Computation
The last year in which a COLA became effective was 2020. Therefore the law requires that we use the average CPI-W for the third quarter of 2020 as the base from which we measure the increase (if any) in the average CPI-W. The base average is 253.412, as shown in the table below.

Also shown in the table below, the average CPI-W for the third quarter of 2021 is 268.421. Because this average exceeds 253.412 by 5.9 percent, the COLA effective for December 2021 is 5.9 percent. The COLA calculation, with the result rounded to the nearest one-tenth of one percent, is:

(268.421 - 253.412) / 253.412 x 100 = 5.9 percent.
CPI-W for— 2020 2021
July 252.636 267.789
August 253.597 268.387
September 254.004 269.086

Third quarter total 760.237 805.262
Average (rounded to the nearest 0.001) 253.412 268.421
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