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Latest Labor Dept. Data Shows Spike in Prices of Food, Oil, and More

IMFIMFConsumers were hit hard by a range of price increases last month, according to new data from the Bureau of Labor Statistics (BLS). Here are some highlights from the Consumer Price Index (CPI), which tracks the changes in costs of household goods:

  • The food index rose 0.5 percent in May after increasing 0.4 percent in each of the three previous months.
  • The index for food at home increased 0.7 percent, its largest increase since July 2011.
  • The gasoline index rose 0.7 percent.
  • The index for all items less food and energy increased 0.3 percent in May after increasing 0.2 percent in March and April.
  • The rent index rose 0.3 percent and the index for owners' equivalent rent increased 0.2 percent.
  • The medical care index increased 0.3 percent in May, as the index for prescription drugs rose 0.7 percent.
  • The index for airline fares rose sharply in May; its 5.8 percent increase was the largest since July 1999.

"Economists … expected consumer prices to rise only 0.2 percent," Reuters notes, compared to the actual 0.4 percent increase.

The Associated Press states that the index for all items less food and energy, also known as core inflation, made "the biggest one-month gain since August 2011. Over the past 12 months, core prices are up 2 percent."

The price of meat, poultry, fish and eggs (a subset of the food index) shot up by 1.4 percent in May. The Weather Channel explains that "the price increases in meat can be directly tied back to the cumulative impact of the drought in California and Texas as well as the drought that hit the corn belt in 2012 and the blizzard … that hit South Dakota in October." Likewise, a drought in Brazil contributed to the boost in coffee prices.

BLSBLS

Economist John Schoen writes for NBC that this may not warrant too much concern:

Despite the attention paid to gasoline prices, for example, they make up a relatively small portion (about 5 percent, on average) of the typical household budget. But they have an outsized impact on consumer spending because many people tend to tighten their budgets when they see pump prices jump.

The reason economists and the folks at the Fed are less interested in food and energy is that the prices of those two commodities are usually pretty volatile—jumping up and down month to month, much more than other goods and services. Those ups and downs eventually wash out of the system.

The outlook on oil is not as optimistic. The BLS's energy data do not take into account this month's instability in oil-rich Iraq. Although gas is already at "a six-year seasonal high,"  according to Bloomberg, disruptions to Iraq's oil flow "may boost pump prices by 10 cents a gallon at a time when they normally drop."

And, for what it's worth, some members of Congress aren't doing anything to reduce gas prices. Instead, Sens.  Chris Murphy (D-Conn.) and Bob Corker (R-Tenn.) today unveiled a plan to hike the federal gas and diesel taxes by 12 cents

The Federal Reserve just concluded a two day meeting, during which it dropped projected economic growth in the U.S. this year from 3 percent to between 2.1 percent and 2.3 percent

After the meeting, Federal Reserve Chair Janet Yellen said, "Recent readings on, for example, the CPI index have been a bit on the high side," but "the recent evidence that we've seen, abstracting from the noise, suggests that we are moving back gradually, over time, toward our 2 percent objective."

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  • Hugh Akston||

    Correct me if I'm wrong, but Serious People consider inflation to be a good thing, right? So rising prices would be a feature, not a bug.

  • Hyperion||

    If there is inflation, it's only because we're not pumping enough. Crank up the presses!

  • Plàya Manhattan.||

    Inflation is a great thing if you owe money, and a bad thing if you have money.

  • ||

    Bad thing! Bad thing!

    I also just realized Janet Yellen looks like a sentient mushroom. Probably a fat Enoki.

  • Plàya Manhattan.||

    A very bad thing. I keep any funds in excess of $20K in a mutual fund meant for people retiring in 2045. I'll let you kick me in the balls if I'm still working then.

    20% a year is nice, though.

  • SQRLSY One||

    Don’t be sayin’ bad stuff-an-stuff About mah Yellen BABE, man… Me an’ her an’ Hillary-Boob an’ Billiary-Boob is a fixin’ to git it ON in a delightful four-some one of these them thar lonely nights, so PWEASE do NOT rain on my fantasy parade, now…

  • LarryA||

    Inflation is a wonderful thing if you tax money. Higher brackets, higher percentages.

  • Hyperion||

    Inflation, it doesn't exist, Rethuglican lies! And even if it did exist, it could never happen here!

  • Bill||

    Relax, the inflation is mainly in unimportant things like food and energy, not the CORE. Who needs to eat or have electricity or an automobile?

  • gaijin||

    the drought in California and Texas as well as the drought that hit the corn belt in 2012 and the blizzard … that hit South Dakota in October." Likewise, a drought in Brazil

    It's like the weather has a huge impact on food production or something. No wonder economists' expectations were off...they might do better as weathermen and women.

  • Lady Bertrum||

    they might do better as weathermen and women.

    Explain yourself.

  • ||

    Should he mansplain or just explain?

  • ||

    I'm pretty sure he was trying to be inclusive of both genders of weatherpeople.

  • gaijin||

    ^this. that'll learn me.

  • Rich||

    "Both" genders?!

    How insensitive!

  • Lady Bertrum||

    *narrows eyes and slowly nods head*

    I wasn't expecting gender sensitivity.

    That'll go to show me I know so little about libertarian men.

  • Lady Bertrum||

    Obviously the cisgender will be outraged at your oversight.

  • gaijin||

    The Cisgender!

    It can't be bargained with. It can't be reasoned with. It doesn't feel pity, or remorse, or fear. And it absolutely will not stop, ever, until you are dead.

  • ||

    "God damn it!!!

    Every time I make economic predictions for December through march it snows and screws up all my calculations!!"

    - Every government economist ever.

  • Dances-with-Trolls||

    I wonder what food prices would look like if America wasn't setting so much food on fire?

  • Raymond Luxury Yach-t||

    The Federal Reserve hasn't a clue.

  • Rich||

    The Federal Reserve hasn't a clue shame.

    FTFY

  • ||

    Stagflation.

  • Medical Physics Guy||

    Took the word right out of my brain. Perhaps the ultimate sign of failed monetary policy.

  • Almanian!||

    DON'T TALK ABOUT LUCY

  • Hyperion||

    Likewise, a drought in Brazil contributed to the boost in coffee prices

    I get all my coffee from Brazil. I pay around $2.50 for quality coffee that would cost at least $10 for the same amount here in the USA. Of course, that requires already being there and bringing it back, or having someone else bring it when they come to visit. But I manage to stay stocked up. One of these days I want to visit a coffee plantation there that I have been hearing about, that has really great coffee and try to buy a good sized bag of beans and try to get it back here.

    I have people at the airlines and customs telling me I have to declare coffee as a food, and then the next person working for airlines or in customs will tell me that I don't. So far, I've been able to bring back a good amount to restock my coffee shelf, with no problems.

  • Hugh Akston||

    Getting your "coffee" one condom-filled rectum at a time seems like, if you'll pardon the expression, a pain in the ass.

  • Hyperion||

    Yeah, not to mention that when one of the condoms break, the people in the aisle seats start to get really pissed at you because you keep getting up and running up and down the aisles every 5 minutes.

  • ||

    I had a friend who snorted some coffee grounds while we were driving up to Smuggler's Notch to go skiing for a week. He started bouncing off the inside of the car immediately and being super hyper. It was pretty funny and didn't last very long. In his defense (and mine, as I egged him on), we were like 16 or so.

  • Hugh Akston||

    we were driving up to Smuggler's Notch

    Okay that's gotta be code for something.

  • Dances-with-Trolls||

    Hey, he said they were young, and young kids experiment. Not everyone gets to go to an English boarding school, Hugh.

  • ||

    Salami smuggling?

  • Greg F||

    Took my wife there for her first and last time zip lining.

  • jmomls||

    Right. I'm sure he chopped up the coffee grounds with a razor to make sure it didn't wreak havoc on his sinuses, too.

  • ||

    Seeing as it was instant coffee if I recall correctly, he didn't need to.

  • Rich||

    Did "your friend" take the cinnamon challenge, too?

  • jmomls||

    That's a really great strategy, considering that airline travel is free and everything.

  • Rich||

    index for food at home

    As opposed to "index for uncomfortable food"?

  • AlmightyJB||

    All my food wear sweatpants

  • Hyperion||

    You eat overweight soccer moms?

  • AlmightyJB||

    No consent forms required.

  • Rich||

    Yellen said, "Recent readings … have been a bit on the high side," but "the recent evidence that we've seen, abstracting from the noise, suggests that we are moving back gradually, over time, …."

    Would someone *kindly* explain exactly what it is that Janet Yellen actually *does*?

  • ||

    Defends her predecessors record by talking shit about it and doing the exact same thing.

  • Rich||

    Oh. Well, I suppose that's worth $201,700 a year.

  • sasob||

    Makes noise?

  • ||

    "the price increases in meat can be directly tied back to the cumulative impact of the drought in California and Texas as well as the drought that hit the corn belt in 2012 and the blizzard … that hit South Dakota in October."

    So we have had a drought in Texas and California since 1967?

    http://www.cnsnews.com/sites/d.....1403018202

    Weird.

  • PapayaSF||

    Supposedly due to the drought, the beef I buy to make jerky went from $4/lb. to $6.50/lb. this year.

    Also, there's some sort of virus that's killing pigs and causing pork prices to rise.

  • From the Tundra||

    Feed prices climbed pretty good last year. Lots of farmers slaughtered earlier than normal. A good supply became a shortage.

    The pig virus is really bad news. My kids are bacon addicts and if my chile verde is threatened, I might just snap.

  • ||

    What is amazing is how that virus has been driving up pork prices for over 40 years and yet we are only now hearing about it.

    Amazing.

  • PapayaSF||

    Not sure what you mean. Yes, prices have risen over the years, but the virus has caused a lot of havoc recently.

  • ||

    yeah recently..

    Seems legit.

    I saw this book not so long ago:

    http://en.wikipedia.org/wiki/The_Population_Bomb

    Apparently everyone died in India 40 years ago.

    Seem legit as well.

    Also i hear the law of comparative advantage is bullshit cuz Krugman says on the margins trade is sometimes better for people who know what they are doing.

    That seems legit as well.

    You hear there is a prophecy that the workers will rise up and create utopia.

    Totally legit.

  • PapayaSF||

    Sorry, my sarcasm translator seems to be on the fritz. Would you mind explaining in a way I can understand just what you think is really happening? Are the drought and the pig virus just fake, and have nothing to do with recent price hikes, or what?

  • Derpetologist||

    Peter Schiff covered this a while back. Pay no attention to the man woman behind the curtain podium.

    http://www.youtube.com/watch?v=gN7wNdGL2FM

  • Derpetologist||

  • ||

    That video makes me want to go out and buy a bunch of meat and eat it....

  • Hyperion||

    Obviously Schiff is a member of the white privileged patriarchy and paid puppet of Kochtopus.

  • ||

    according to Bloomberg, disruptions to Iraq's oil flow "may boost pump prices by 10 cents a gallon at a time when they normally drop."

    Oil prices normally drop during the summer driving season?

    Probably would not be that hard to find Bloomberg saying only a few years ago that recent rises in oil prices were due to seasonal increases in driving during the summer months.

    You know like if there was a person doing research for an article with links to and stuff to other articles and posting what those other articles say uncritically....

    I wonder where we could find someone like that?

  • Winston||

    The solution is price controls obviously. If only that right-wing radical Nixon had done so in the 1970s then we would have had utopia...oh wait.

  • Rich||

    "Everything's One Nuevo Dollar!"

  • Winston||

    Here's libertarian hero George McGovern on Nixon's price controls:
    http://news.google.com/newspap.....75,1755290

    http://news.google.com/newspap.....22,2528256

  • ||

    A proggy told me just this afternoon that we should have a living wage law here 'cuz feelings and intentions. When I pointed out that she was adding emotions into a math problem she said she didn't care, that is just how she feels.

    Jebus fuck.

  • Matrix||

    But.... FEEEEEEELINGS!!!

  • ||

    A proggy told me just this afternoon that we should have a living wage law

    We have one.

    It is found in the constitution under the enumerated powers of congress:

    To borrow Money on the credit of the United States;

    To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

    Because wages lag Inflation has destroyed the middle class more then anything else in the United States.

  • PapayaSF||

    A Facebook friend insists that once the minimum wage goes up, "everyone will have more money" and thus the economy will improve. When I suggested she simply pay employees at her small business higher wages, she said it wouldn't work unless everyone was forced to do it at the same time.

  • Rich||

    Exactly. "A rising tide raises *all* boats!"

  • ||

    Is economic illiteracy caused by ignorance or apathy? I don't know, and I don't care!

  • Matrix||

    OT: Police officer executes inmate who is in handcuffs. Grand Jury refuses to indict the officer.

    NOTHING ELSE FUCKING HAPPENED!!

    PoliceOne's take

    Some of the comments excoriate the officer for this, but many are saying "We weren't there. Who are we to second guess the officer?" "Handcuffed people are dangerous. "Thank God he went home safe." Oy vey...

  • ||

    I wonder if the grand jury saw the video.

  • sarcasmic||

    What else is a compliance officer to do when someone fails to obey?

  • bvandyke||

    Ok, flame me if I am wrong, but a quick sting with Excell and the numbers on the graph show me that spending $100 back in April of 2013 now costs $121.77 (~21% change over 13 months). From a family perspective this isn't good as my 3% or so raise can't come even close to keeping up with the rising costs. Paid off bills, canceled cable and other things and still have less at the end of the month than I did 2 years ago.

  • bvandyke||

    I do not want price controls, if we could get the Gvt off it rear end and reduce some restrictions and taxes it would work out.

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