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For consumers and producers electricity and utility costs are still soaring

Mike “Mish” Shedlock's Sitka Pacific Capital Management,Llc

The price of gasoline has been falling, utilities are another matter.

CPI and PPI Data from BLS, chart by Mish

Year-over-year price changes

For consumers, the price of electricity is up 15.8 percent from a year ago. That is the largest 12-month increase since August 1981.
For producers, the cost of electrical power is ups 12.2 percent from a year ago.

Month-over-month price changes

CPI and PPI Data from BLS, chart by Mish

CPI: In the last three months ending in August, the cost of electricity has gone up 1.7%, 1.6%, and 1.5%.
PPI: In the last three months ending in August, the cost of electricity was -0.2%, 2.6%, and 1.0%.

CPI major energy components

CPI data from the BLS, chart by Mish

CPI energy component changes

Energy Aggregate: -5.0%
Gasoline: -10.6%
Natural Gas: 3.5%
Electricity: 1.5%

CPI energy weights

Energy: 8.782
Gasoline 4.824
Electricity 2.658
Natural Gas 0.954
Fuel Oil: 0.239

Although gasoline fell 10.6% in August, the overall energy drop was muted due to rising electrical and natural gas costs.

Utilities have been increasing prices regularly, mostly due to the rising price of natural gas.

September natural gas

Natural gas futures courtesy of Trading Economics, annotations by Mish

If the month were to end right here, the average price of natural gas seems roughly in line with the average price in August.

September unleaded gasoline

Gasoline futures courtesy of Trading Economics, annotations by Mish

Energy CPI look ahead for September

AAA has the unleaded price of gas at $3.70. A week ago it was $3.77 and a month ago $3.96.

Unfortunately, I do not have the price at the start of the month. I am guessing prices are down for the month an average of 5 percent. A bounce to the end of the month can easily take all of that away.

It's a bit too early to project, but as with August, the CPI will come down to rent, owners' equivalent rent (OER), and food once again.

If the price of gasoline spikes for any reason, the CPI might be very ugly in September.

Author

Mike “Mish” Shedlock's

Sitka Pacific Capital Management,Llc

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