US Consumer Price Index up 4.2%

Paradoxically, inflation has contributed to me taking a sabbatical. While I live in a LCOL area and made ~140k/year it just no longer felt worth it to work as I saw my retirement accounts start to match and exceed my salary in yearly gains. I do plan on going back to work in a part time manner, but inflation has killed any reason for me to work hard at a job for that level of salary. Furthermore, the feeling of "what's the point" around white collar work has never been more intense.

Remember this next time you get your yearly review/raise. 4.2% is what you need to stay even, anything less is a pay cut.

Here are some N-year rolling total inflation charts to put this datapoint in a longer-term perspective: https://totalrealreturns.com/inflation . Zooming out always smooths the noise.

Up 4.2% (2.9% core, i.e. stripping out food and energy) over the last 12 months before seasonal adjustment.

The higher-frequency data are more concerning. CPI “increased 0.5 percent on a seasonally adjusted basis in May, after rising 0.6 percent in April” and 0.9 percent in March [1]. (0.3, 0.2, 0.3 percent for December, January, February, respectively.)

So a linear trend of 6% from March, closer to 9% if one extrapolates the March-April-May quarter. Almost all of that driven by food and energy. Core spiked to 0.4% MoM in April, but calmed down to 0.2% in May, on trend with pre-war numbers. It’s up 2.9% YoY, but trending a bit lower. (Looked at another way, we’ve already “booked” 2.5% of inflation for ‘26. If we continue at 0.5% MoM, we close the year +5.6%. Even if it drops to pre-war 0.2%, we’re still going to be +3.8%. Given the resumption of hostilities, I’m betting we’ll be closer to the former.)

Together with the jobs numbers, it would be weird for an independent Fed to not raise rates.

[1] https://www.bls.gov/news.release/cpi.nr0.htm

Prices have doubled since 1999!? Restaurant prices near me have doubled since 2015, easily. And that's not counting delivery going from free to 25% of the meal cost.

The worst part of this report is my diminished faith in the numbers.

Remember this is the number the Government is measuring and reporting. The "real" inflation that every day people feel in their wallet is significantly higher.

I find it interesting how many people act like inflation doesn’t exist especially with salaries.

If you made 100k in say 2000 the equivalent would be 200k today. If you go by median house price your salary should have doubled since 2015!

All of the increase is from energy. Oil prices.

Is this with the new method of counting what inflation means? (trimmed mean, without outliers)

U.S. consumer wages index down -1% this past three months. also. We almost briefly started climbing positive in January, but nope, another 1% drop, sigh.

See also the +25% inflation / -1.2% net wages after inflation over five years chart here, for those unfamiliar with how inflation % press releases are misleading over time. If household spending power is -1% after +4% inflation, then that inflation probably isn’t healthy for your country’s economic future, etc.

https://www.statista.com/chart/32428/inflation-and-wage-grow...

(I also suspect the wage index itself is disguising about the total wages paid index dropping like a stone, but haven’t done the math to chart it yet myself yet.)

considering Iran War is likely to still be happening January 2029, imagine what costs will be like by then

every single day $5/gas is taking a BILLION dollars out of the economy that could have gone elsewhere

but it could be worse, we could be innocent civilian Iranians having the US bomb their water and power plants this week

Take on debt, as much as possible. Otherwise, inflation will end all. Inflation eats debt.

Worse is coming and the markets seem to be in complete denial about it.

Oil has only really maintained the ~$100/barrel price because of record SPR releases worldwide. Also, that $100 price is kinda fake because it's a future price. The spot prices got much higher. Well, that runway is coming to an end. If the Strait of Hormuz re-opened today , we'd still be facing an energy shock. Plus there's famine coming.

Now the US won't run out of oil or refined petroleum products. The uS is now a net exporter. But it's a global marekt so the prices are going to go way up. And some countries and heavily dependent on oil for electricity. They are going to face blackouts.

So even though fertilizer shortages are skewed towards the Global South, food prices too are global so they're going up too.

In 1973, the energy shock took ~6 months to manifest [1].

But I think the real problem is dynamic pricing. Inflation is insidious. People start raising prices on the expectation of rising prices, thus causing prices to rise. But so many industries now are going well beyond that by essentially colluding through AI tools (eg RealPage) to further raise prices.

I honestly don't know how this ends without a deep, long recession.

[1]: https://paulkrugman.substack.com/p/oil-crises-past-and-possi...

The Iran conflict will continue on a low flame (occasional pinpricks like now) forever.

It serves the US Energy Dominance Agenda against China, Japan, India and the EU.

The Trump administration does not care about "its" population. There were already rumors early in the Trump term that Trump would not mind a recession so that his real estate cronies could buy cheap foreclosures.

So it is all a double win for the oligarchs. The stock market is still fine, nothing else matters.

Regressive consumer tax due to tariffs?

Thanks, Obama.