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November 11, 2021

CPI Inflation Report: October 2021.

Sean Streb

Sean Streb

Summary: Worse Not Better

Inflation saw a decent spike for the Sept -Oct period. Prices are up across the board but the majority of price increases are still in localized sectors. For the full report visit this link.

  • All items index increased 6.2% over a 12 month period ending in October, which is the largest 12 month increase since November 1990
  • CPI increased 0.9% in October compared to the 0.4% increase in September
  • This months inflation report shows more broad increases that last month
  • The 12 month index increased 6% for all items
  • Energy index increased 4.8% , Gasoline is up 6% from last month and fuel oil is up 12 %
  • Used cars and Trucks saw it‘s first major increase since June
Note the sharp increase from Sept to Oct. Image courtesy of BLS.gov

This could be as sign that inflation will get much worse. Keep in mind that the economy is sitting on a powder keg of newly printed dollars. We have not seen a demand spike that will kick inflation into high gear at this point.

Energy: Oil + $100 dollars a Barrel?

Aside from food, energy has seen the largest consecutive increases over the last 1 month and 12 month periods. Energy is up 4.8% since September. In the last 12 months, energy is up 30%! This is the largest 12 month increase since the period ending in 2005. Last time this happened, Brent Crude Oil bunched through $100 a barrel almost a year later. In this current market, I think that supply shortages and increased demand will soon see oil jump in the next year or sooner.

I am working on an article talking directly about the future price of oil and that will be out in a few days. I will also be talking specific stocks that myself and professional analysts really like that will allow the average investor to take advantage of the increase in the price of oil.

Can You Trust These Numbers?

Most likely. But I'm always skeptical.

The Beauru of labor statistics changed how it measured inflation several times since the 1980’s. Depending on how you measure the numbers the CPI will change. Sometimes this is necessary, but sometimes the changes can skew things in order to make things look better than they actually are. The CPI is a based off a “basket” of goods; that is to say a set of goods that the average consumer usually buys during a 1 month period. Since Iphones and other gadgets didn’t exist in the 80’s and 90’s, this type of tech spending changed the way CPI is measured.

Using 1980-Based measurements (courtesy of shadow-stats) we see that inflation is nearing 15%! Keep this in mind before accepting the current number at face value. Trust but verify.

For questions and comments, you can reach me at smstreb97@protonmail.com or through the A1Trading discord at @smstreb97

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