Consumer Inflation May Hit 10% This Summer

The Fed and many other people are thinking that inflation year over year will start to drop this summer. But, will they be correct?

Here is a graph below showing the monthly consumer price index changes for the last 12 months. Last July, August and September we had much lower monthly price increases but this year these numbers will be removed from the year over year calculations. For example, when the July 2022 report is released in August it will no longer contain the inflation reading of 0.5% from July 2021. Then, the August 2022 report released in September will no longer contain the monthly inflation readings of both July and August 2021. Ditto for the September report released in October.

I won’t be surprised if this years inflation readings from July, August and September will total at least 2.5% and could easily be over 3%. Why? Gas prices are always higher in the summer as people drive more. Second, there will be food shortages around the globe this summer and food prices will rise much faster I am afraid. Why? First, the war in Ukraine. Second, floods and droughts around our country and globe. Third, many farmers haven’t been able to grow as many acres of crops this year in our country due to soaring diesel and fertilizer prices. I have read that fertilizer prices have tripled this year. Less supply means higher prices.

Thus, if these 3 readings from July-September total 2.5% our year over inflation rate would be about 8.6% plus the upcoming June reading. And if these 3 readings total 3% then our year over year inflation rate would be 9.1% plus the upcoming June reading. There is a possibly that we may see an inflation reading of 10% thus summer on a year over year basis.