As you can see in this above table, these sharp rises in gas prices have resulted in big monthly change in CPI. These monthly changes in CPI around 1% are representing an annualized inflation rate of double-digits (well above what has been the high year-over-year rate recorded thus far).
So, as far as Wednesday's number goes, this gas price input is bad news.
But there is some hope that the inflation report could come in a softer, and therefore, take some pressure off of the Fed to act more aggressively.
We looked at the wage data on Friday.
The Fed is worried about the wage pressure influence on prices (or worse, a wage spiral).
On that note, the June jobs report showed average hourly earnings grew by 0.3%. If we annualize that, we get 3.7% wage growth. That's significantly lower than the year-over-year change of 5%+.
That's good news (i.e. less pressure on prices).
Finally, let's take a look at what's happening in China, where the products are made that we will be buying in the many months ahead…