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IPFS News Link • Economy - Economics USA

Dollar's Purchasing Power Dwindles to Another Record Low. Fed is Getting its Wishes

• Wolf Street

Durable goods inflation +3.3%. Food inflation +3.4%. Services inflation rising, but still held down by battered airline fares, lodging, event tickets, etc. — until people start traveling and going to events again.

By Wolf Richter for WOLF STREET.

The Consumer Price Index rose 1.7% in February from a year earlier, the fastest year-over-year increase in 12 months, picking up speed from the stall in April and May last year. Prices of goods are rising sharply, amid all kinds of shortages of durable goods after stimulus-fed red-hot demand, and food prices are rising too, according to data released by the Bureau of Labor Statistics today.

Price increases for services, the biggie, are held down by the battered discretionary services such as lodging, airline fares, and tickets for sporting and entertainment events, whose sales have collapsed.

Durable goods (blue line) account for 10.9% of overall CPI (laptops, new & used cars, appliances, bicycles, etc.)

Nondurable goods (green line) account for 26.6% of overall CPI (dominated by food and energy). Spiking & collapsing energy prices caused the larges moves of the index.

Services (red line) account for 62.5% of overall CPI (rent, healthcare services, airline tickets, cellphone services, etc.).