The highest inflation in 40 years is deeply embedded in the economy and spreading

Today's CPI inflation report shocked Wall Street and the nation with a significantly higher than expected print. Pollyannas everywhere are painfully learning that there's no magic cure. There's no easy way out. 

After several years of excessive federal spending, regulating, taxing and money-printing, the highest inflation in 40 years is deeply embedded in the economy and it is spreading. The only significant decline came with gasoline prices. 

Overall, the topline CPI came in at 8.3% for the year — food up 11.4%, even energy is still up 24%. Electricity is up 16%; natural gas 33%; new cars 10%. Even with the recent drop, gasoline is still 26% above a year ago. Rent is up 6.5%. Overall, services are up nearly 7%. Core goods prices are up 7%. Used cars are up nearly 8%. The so-called core inflation rate, omitting food and energy, has risen 6.5% annually over just the past three months. 

In terms of broader measures, the Cleveland Fed's median CPI increased to 6.7% year-on-year and the 16% trimmed mean, which chops off the highest and lowest 8% of outlier prices, is up 7.2%. The Atlanta Fed's wage tracker is up 6.7%, but real wages had their 17th-straight negative month. In other words, middle-class working folks are getting clobbered, absolutely clobbered. They're working more but buying less.