Food, Energy Inflation Soars Amid Virus, Jobs Uncertainties

INDICATOR: June Consumer Prices, Real Earnings and Small Business Optimism

KEY DATA: CPI: +0.6%; Ex-Food and Energy: +0.2%; Food: +0.6%; Energy: +5.1%/ Real Earnings: -1.7%; Over-Year: +4.3%/ NFIB: +6.2 points

IN A NUTSHELL: “Inflation is not an issue unless you eat, drive and/or cool your house (yes, that is an oldie but goodie, but it still works).”

WHAT IT MEANS: Almost 15 years ago, I used the comment above to criticize the Fed for saying that inflation was not an issue if you exclude food and energy. That caught the eye of at least one member of the Fed, Janet Yellen, who kidded me about it at a program where I received a forecasting award. Well, sufficiently chided, I stopped using the phrase, but it is worth trotting out again. For the most part, inflation is quite tame, as we saw in the June Consumer Price Index report. But as anyone who buys food knows, the costs of eating at home continue to rise pretty sharply. They jumped again in June and are up 5.6% over the year. Meat, poultry and fish costs are up double-digit over the year, but most other food prices rose sharply as well. Being the one who does the shopping in the house, I can testify that costs are surging and the supply chain remains frayed as well.

Read Newsmax: Inflation is not an issue unless you eat, drive and/or cool your house | Newsmax.com
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