Inflationistas Sound Alarm

The CPI rose 0.5% in January. Energy led the way, up 5.5%. Apparel rose 1.7%, shelter 0.2%. Year-over-year CPI was flat.

Inquiring minds are diving into the January Consumer Price Index (CPI) report from the BLS.

For the month, the CPI jumped 0.5% but year-over-year the CPI was flat.

CPI Year-Over-Year

CPI Year-Over-Year Major Categories 

CPI Components

Shelter, the largest weighted component in the CPI, helped limit the month-over-month rise.

It’s curious the BLS does not consider shelter a “major category” even though it constitutes 32.8% of the CPI.

Inflationista Alarms

Breaking: Consumer Price Index reached 2.1 percent in January, a sign of inflation that could signal a bumpy day ahead on Wall Street https://t.co/TnepHDcAVh

— Washington Post (@washingtonpost) February 14, 2018

US 10-year Treasury yield jumps after report shows higher-than-expected inflation https://t.co/l4griOmxIT

— CNBC (@CNBC) February 14, 2018

JUST IN: Dow Jones futures drop sharply after new data fuels inflation fears https://t.co/Twu73KL6Us pic.twitter.com/tnyiPgvXot

— The Hill (@thehill) February 14, 2018

Hmmmm. Higher CPI than expected. And S&P futures immediately drop. The inflation scare has further to run.

— John Authers (@johnauthers) February 14, 2018

#Gold rose almost $24 or 1.8%, most since May after #inflation surprise (to the upside). pic.twitter.com/GDujeXzn5D

— Holger Zschaepitz (@Schuldensuehner) February 14, 2018

Spotlight Crude

The thin blue line in the above chart connects January 2017 to January 2018.

Four months from now, energy will give a big boost to the year-over-year CPI even if the price of crude remains steady.

The May 2107 close was $46.04. A jump from $46.04 to $60.81 would constitute a 32% year-over-year jump.