According to a new report from the US Labor Department, inflation continues to rise quickly.
Price of Consumer Goods & Services Up +8.6%
The overall price of consumer goods and services increased +8.6% y/y as measured by the Consumer Price Index (CPI). Month-over-month, inflation rose +1% in May after rising just +0.3% in April.
Core inflation, a data measuring point that excludes food and energy prices in its calculations, increased +0.6% in May.
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Translation? The cost of everything will continue to increase.
Specifics of Increased Costs
According to the US Department of Labor, the average cost of goods and services listed below has increased by these percentages over the past year:
- Gas – +48.7%
- Used cars and trucks – +16.1%
- New vehicles – +12.6%
- Electricity – +12%
- Food at home – +11.9%
- Food away from home – +7.4%
- Shelter – +5.5%
- Apparel – +5%
It’s All About Location
Just as in real estate, inflationary costs are all about location. The above listed costs are average costs. The specifics of each average cost in different parts of the country are extremely variable.
For example, according to AAA, the average price of a gallon of gas is $5.56. However, in Nevada, a gallon of gas costs $5.62 while in California, the average price of gas is $6.42 a gallon.
In Mendocino, CA, one gas station has recently been charging nearly $10/gallon.
Recession Talk
Of course, rising inflation and CPI costs are stoking increasing inflation recession fears, talk and expectations. In fact, the most recent CNBC CFO Council Survey pointed to more and more chief financial officers saying that a recession is “unavoidable” but likely not occurring until the first half of 2023.
One such SFO, Gus Faucher, the CFO with the financial services company PNC Financial Services Group, said, “The likelihood of recession this year is pretty low.”
Adding to the chorus, Jamie Dimon, CEO of JPMorgan Chase, and Tesla CEO Elon Musk are also concerned about a possible recession as inflation hits its highest annual rate in over 40 years.
Dimon said that he sees an economic “hurricane” on the horizon but doesn’t quantify the strength or timing of the hurricane. Musk reportedly said in an internal email that he had a “super bad feeling” about the economy while announcing plans to cut 20% of salaried Tesla workers.
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Thanks to CNBC and National Public Radio.
