CPI Hotter Than Expected, Highest In Three Years, A Genuine Disaster

Month-Over-Month CPI

The BLS reports the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent on a seasonally adjusted basis in April, after rising 0.9 percent in March.

Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.

The BLS rounds to 1 decimal point. I show 2 decimal places

CPI Month-Over-Month

• All Items: 0.64 percent

• All Items Excluding Food and Energy: 0.38 percent

• Food and Beverage: 0.49 percent

• Shelter: 0.61 percent

• Owners’ Equivalent Rent: 0.53

• Rent of Primary Residence: 0.55

• Medical Care Services: 0.00 percent

• Medical Care Commodities: -0.35 percent

• Energy: 3.81 percent

• Gasoline: 5.44 percent

• Food at Home: 0.68 percent

• Food Away from Home: 0.23

This is structurally much worse that last month’s 0.87 percent rise because it is very broad based.

This month, everything jumped but medical.

CPI Month-Over-Month Energy, Gasoline, Utilities

Month-Over-Month CPI: Energy, Gasoline, Utilities

Energy, Gasoline, Utilities and Fuel Month-Over-Month

• Energy: 3.81 percent

• Gasoline: 5.44 percent

• Utilities and Fuel: 1.38

These increases are on top of last month’s huge leaps.

CPI and PCE Year-Over-Year Percent Change

CPI and Core CPI Year-Over-Year

3.8 percent is the highest year-over-year inflation since 4.0 percent in May of 2023.

CPI Year-Over-Year Percent Change Major Categories

CPI Year-Over-Year Major Categories

CPI Year-Over-Year Percent Change Major Categories

• All Items: 3.8 percent

• All Items Excluding Food and Energy: 2.8 percent

• Food and Beverage: 3.1 percent (13.56 percent of CPI)

• Shelter: 3.0 percent (35.32 percent of CPI)

• Medical Care Services: 3.2 percent (6.89 percent of CPI)

• Utilities and Fuel: 6.0 percent

• Energy: 17.9 percent (7.09 percent) of CPI

CPI Year-Over-Year Select Components

CPI Year-Over-Year Percent Select Categories

• All Items: 3.8 percent

• Medical Care Services: 3.2 percent

• Utilities and Fuel: 6.0 percent

• Energy: 17.9 percent of CPI

• Gasoline: 18.9 percent of CPI

Hot Water Soup

This month’s special is hot water soup. I have a tribute.

Small Price to Pay

Hot water soup is a small price to pay for giving Iran control of the strait.

Wait! What?

Never mind, focus on the mission.

Q: What’s the Mission?
A: Our mission is to return the strait to where it was before we started this war.

That’s going spectacularly because Iran has no cards.

Truth Social: The Iranians don’t seem to realize they have no cards, other than a short term extortion of the World by using International Waterways. The only reason they are alive today is to negotiate! President DONALD J. TRUMP

I’m sure glad for that. Imagine if Iran had cards.

Powerful Reset

Truth Social: WORLD’S MOST POWERFUL RESET!!! President DJT

On occasion, usually by accident, Trump manages to tell the truth.

Giving Iran control of the strait while it collects tolls paid in cyrpto and yuan, coupled with punishing everyone with asinine tariffs, was indeed the most powerful (albeit stupid) global reset combination in decades.

Patience Limited

On March 30, 2026, I noted Powell Warns the Markets and Trump that His Patience with Inflation Has Limits

Powell’s speech was to Harvard students but read between the lines.

Powell’s warning was aimed straight at Trump. But that’s OK because Powell is no longer Fed Chair.

Kevin Warsh is the new Fed Chair.

Baptism of Fire Coming Up

The May PCE numbers are due June 10. That’s just in time for Kevin Warsh’s first FOMC meeting as Fed Chair.

Trump expects Warsh to deliver a rate cut. I believe the Fed bias will be shift to tighten from neutral.

Warsh’s first press conference rates to be a real hoot.

Yesterday, I noted Cleveland Fed CPI and PCE Forecast for Next Two Months Is an Inflation Disaster

Month-Over-Month Inflation Nowcast

• April CPI: 0.45 percent

• April Core CPI: 0.21 percent

Year-Over-Year Inflation Nowcast

• April CPI: 3.56 percent

• April Core CPI: 2.56 percent

It appears the Cleveland Fed was more than a tad bit optimistic for today.

Finally, please consider Oil Market Will Lose 100 Million Barrels a Week if Hormuz Remains Closed

Trump says the cease-fire is on life support. So what?

When year-over year inflation surges for at least two more months, what will Warsh do about it?