January’s Rise of the Consumer Price Index (CPI)

Today, the U.S. Bureau of Labor Statistics announced that in January the Consumer Price Index (CPI) rose 0.6% on a seasonally adjusted basis. The CPI is up 7.5% over the last 12 months, not seasonally adjusted. That is the highest 12-month rate since February 1982, just prior to when the stagflation of the 1970s was finally defeated.

The Georgia Center for Opportunity’s (GCO) take: “Our nation’s recent bout of severe inflation continued in January and doesn’t show signs of easing anytime soon,” said Erik Randolph, GCO’s director of research. “The rate once again exceeded consensus estimates from economic experts. Alarmingly, there seems to be a major disconnect between politicians and insider pundits over how impactful inflation is for the average American. They say we should be thankful for rising wages, but Americans are still net losers in this highly inflationary environment. When you can’t find a decent used car, your energy bills are spiking, and your grocery bills might have doubled in one year’s time, minimal wage gains are little solace.

“The monthly inflation rate for January is unsettling: 0.8% prior to being seasonally adjusted. When annualized, it’s double digits inflation (10.6%). If it were a fluke, that would be one thing. But this is the fifth time this has happened over the last ten months. This is not unpredicted. We’ve been saying since the beginning—along with many economists—that the actions taken by the federal government because the pandemic would lead to inflation.”