US Consumer Prices Soar at Fastest in 39 Years, Real Wages Tumble for 9th Straight Month

The comments below are an edited and abridged synopsis of an article by Tyler Durden

In the US, consensus was convinced—with barely any outliers—that the January 12 Consumer Price Index would print with an astonishing 7% YoY (and notably 7 of the last 9 releases have come in this consensus), and they nailed it with the 7% print at its highest since June 1982.

US Consumer Prices Soar at Fastest in 39 Years, Real Wages Tumble for 9th Straight Month
CPI Consumer Price Index Word 50 US Real Dollar Bill Banknote Money Texture on White Background

That is the 19th straight monthly rise in headline CPI, and core CPI also surged to its highest since February 1991 (printing hotter than expected at +5.5% YoY).

Commodities, shelter, and new-and-used cars and trucks saw prices jump the most. Energy saw a modest 0.4% retracement (that will not be the case in January).

The cost of housing is accelerating once again. Shelter inflation rises to 4.13% YoY from 3.84%, the highest since February 2007.

And if you think that used car CPI is going to slow anytime soon, think again.

In fact, while Services inflation rose to +3.7%—the highest since January 2007—Goods inflation soared 10.7% YoY, the highest since May 1975.

Finally, and perhaps most importantly for Main Street, real average hourly earnings fell (down 2.4% YoY) for the 9th straight month.

So the next time a politician tells you to be grateful that your wages are going up or that you can move to a new higher-paying job, just remind them that the surge in the cost of living is outpacing wage gains, thanks to the Fed’s money printing and Congress’s lockdown policies, which have crushed the quality of life for millions.

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