Real Wages Fall for Nineteenth Month as Price Inflation Barely Cools
The federal government’s Bureau of Labor Statistics released new price inflation data today, and according to the report, price inflation during the month decelerated slightly, but remained near 40-year highs. According to the BLS, Consumer Price Index (CPI) inflation rose 7.7 percent year over year during October, before seasonal adjustment. That’s the twentieth month in a row of inflation above the Fed’s arbitrary 2 percent inflation target, and it’s eleven months in a row of price inflation above 7 percent.
Month-over-month inflation rose as well, with the CPI rising 0.4 percent from September to October. October’s month-over-month growth also shows some acceleration in monthly price inflation growth. Month-to-month growth had been approximately zero in July and August.
October’s growth rate is down from June’s high of 9.1 percent, which was the highest price inflation rate since 1981. But October’s growth rate still keeps price inflation well above growth rates seen in any month during the 1990s, 2000s, or 2010s. October’s increase was the eighth-largest increase in forty years.
The ongoing price increases largely reflect price growth in food, energy, transportation, and especially shelter. In other words, the prices of essentials all saw big increases in October over the previous year.
For example, “food at home”—i.e., grocery bills—was up 12.4 percent in October over the previous year. Gasoline continued to be up, rising 17.5 percent year over year, while new vehicles were up 8.4 percent. Shelter registered one of the more mild increases, with a rise of 6.9 percent, according to the BLS.
The rise in shelter, however, was an increase in October over September when shelter prices rose “only” 6.6 percent, year over year. In October this year, shelter prices were up 6.9 percent year over year, and 0.7 percent, month over month. This was the largest month-over-month increase since March of 2006 and was the largest year-over-year increase since July of 1982. The CPI is finally starting to reflect the enormous surges in costs that many renters have been experiencing in recent years.
Meanwhile, so-called “core inflation”—CPI growth minus food and energy—has hardly shown any moderation at all. In October, year-over-year growth in core inf