A dollop of sarcasm in the headline does not imply I am bitter and cynical.*
The energy components were down a tick month-over-month while up dramatically from those very depressed levels of a year ago (BLS):
Energy
The energy index declined slightly in April falling 0.1 percent after rising in
each of the last 10 months. The gasoline index declined 1.4 percent in April,
also ending a string of ten consecutive increases. (Before seasonal adjustment,
gasoline prices rose 2.0 percent in April.) Other major energy component indexes
increased in April. The index for electricity increased 1.2 percent and the
index for natural gas rose 2.4 percent over the month, its third consecutive
increase.
The energy index rose 25.1 percent over the past 12 months. The gasoline index
rose 49.6 percent over the last 12 months, its largest 12-month increase since the
period ending January 2010. The index for natural gas increased 12.1 percent, and
the index for electricity rose 3.6 percent over the same period.
Trading Economics (also on blogroll at right) had the consensus expectations for headline at 3.6%:
The annual inflation rate in the US soared to 4.2% in April of 2021 from 2.6% in March, well above market forecasts of 3.6%. It is the highest reading since September of 2008, with gasoline (49.6 percent), fuel oil (37.3 percent) and used cars and trucks (21 percent) recording the biggest increases. The effects of the coronavirus pandemic are weighing on prices since in last year many businesses closed and lockdowns were imposed, denting economic activity. Also, a jump in commodities and material costs, coupled with supply constraints, are pushing producer prices up and some companies are passing those costs to clients.
The energy components will continue to show those massive Y-o-Y increases for months to come and because they are so visible will be addressed dismissively among the cognoscenti.
We mentioned the base effect back in February:
As farmers head into the planting season bear in mind we haven't even seen the effects of the YoY doubling of oil prices (technically the infinite move from negative futures prices but whatevs) feed into food prices. It takes a lot of gasoline or diesel to run those big tractors and combines, and then deliver the commodities to the processors, and then get your goodies to you.
And the dismissal of energy prices is all well and good but the problem going forward will be those second (and third) order effects as the higher gasoline, diesel, and jet fuel prices feed into the rest of the economy.
*However:"Warped sense of humour could be ‘sign of impending dementia’"
