Consumer Price Index increases 0.8% in February 2022. One year increase highest since January 1982.

The Consumer Price Index (CPI) increased 0.8% in February 2022 after increasing 0.6% in January, 0.5% in December 2021, and 0.8% in November.

That is 1.9 % for the last three months.

Graph at top of this post shows the monthly increase in the all-items index along with the core change, which excludes food and energy. Graph also shows an average of the preceding 12 months for the all-items indicator.

The 12 month cumulative change continues to skyrocket. The monthly change in all items index and the cumulative change for 12 months looks as follows:

As an aside, please note the inflation rate has been running hot since far before Russia invaded Ukraine in January 2022.

BLS calculates the year-over-year at 7.9%. Compounding the monthly rate actuals shows 7.98%. The BLS announcement reports this is the highest increase in the year-over-year rate since January 1982. Ouch. Highest in 40 years. Double ouch.

With more time it is easier to see a breakout of the inflation rate back in spring 2021. The 12-month change had been running around 2% before the pandemic. The year-over-year change has been rising since the start of 2021 and is sitting close to 8 percent. My guess is we will likely see higher increases in the near future.

For longer term perspective, let’s look at the monthly CPI change and year-over-year for preceding 12 months. Check it out:

From around 2010 through 2014 you can see inflation was running around 2% with a peek at just under 4% in mid-2011. Zero inflation was seen most of 2015, then rising back to the roughly 2% range for several years before the pandemic.

The longer-term graph highlights the surging inflation in 2021 and 2022.

Let’s look at what the inflation rate would be if it continued for a year at the monthly change. In other words, let’s annualize the monthly increases.

Following graph shows my calculation of the monthly change in CPI, trailing three-month average, and an annualization of the most recent three-month change.

The results of annualizing the three-month change:

This makes obvious the jump in inflation starting early in 2021. Smooth out the curve and it looks like we are in the 8% range. We have been in that range since the middle of 2021.

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