U.S. Inflation Data Came in as Sticky and Saw the Biggest Increase in 31 Years

U.S. consumer prices accelerated in October largely backed by soaring gasoline and food prices. The sticky inflation numbers which saw the biggest annual gain in 31 years differs from what the FED remarked as transitory.

The consumer price index (CPI) advanced by 0.9% in October compared to 0.4% in September. Compared to a year earlier inflation inched up by 6.2% beating expectation of 5.9%, marking biggest year-on-year rise since November, 1990.

Core CPI reading increased by 0.6% compared to 0.2% a month earlier which compared to a year earlier translates to 4.6%.

Overall energy prices were one of the key contributors to the soaring inflation number with overall energy index increasing 4.8% with fuel oil accounting for the most increase of 12.3% followed by gasoline by 6.1%.

Used car and truck index resurfaced again bouncing upward by 2.5% marking the biggest increase since the latest peak in June 2021. This is party due to supply chain constrains and chip shortages leading to disruption of supply in new car market pressuring prices of used vehicles upward.

Food prices increased sizably by 0.9 remaining flat with the September number.

The Labor Department noted in a sperate report, real wage fell 0.5% in October compared to September.

CME’s FedWatch tool priced in two rates increase in 2022 with 44% probability of a third hike. The 5-year breakeven inflation rate reached record high above 3%.