INFLATION: the 12-month CPI decreased from 8.5% to 8.3% for April 2022. Energy prices were up 30% and that is worldwide AND Used Car Prices were up 23%. Exclude energy, food, and Used Cars and inflation was 5.8%. The Federal Reserve sets interest rates based on the PCE which is 5.1%.
INFLATION’s major causes are: higher Energy and Used Car Prices. As a bar gets closer to the LEFT, it will fall off as new monthly data becomes available. The black hatched bar is the month that has recently fallen off and has been replaced by the most recent month’s data, that being April 2022. Higher interest rates will NOT solve these isolated sources of inflation.
GAS PRICES are an international item that affects all. Putin invades Ukraine 2.24.22.
Note that gas prices pulled back slightly in April 2022. This will bode well for that month’s
inflation data. The March 2022 spike will continue to be included in the annual CPI
calculation for the next 11 months. It is the gift that will keep on giving.
As we move forward in 2022, as the impacts of COVID subside, the economy will come into focus. Below are the publication dates of the CPI, PPI, and Net New Jobs. These items will be key factors during the Federal Reserve’s meetings which are also listed below.