Inflation: People are worried about it and the latest numbers are hot off the press

5/11/21 8:00PM

This week stock markets have been under pressure as investor worries about meaningfully higher inflation have begun to go mainstream. Indeed just last week we wrote about the price of lumber, which has spiked almost 500% in the last 12 months, making housebuilding significantly more expensive.

‍The numbers are in

‍So the US inflation data released this morning had a lot of eyeballs on it — and the numbers came in pretty meaningfully ahead of expectations. Overall the Consumer Price Index (which measures the prices of a basket of consumer goods and services) is up 4.2% over the last 12 months. That's the highest reading since 2008.

Some of that jump can be explained by the pandemic because comparing anything from this year with 12 months ago can look pretty weird — but even the monthly gain was +0.8%, way ahead of forecasts for +0.2%. Inflation might be back.

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American Airlines joins the flock, hiking bag fees amid higher jet fuel prices

American Airlines on Thursday announced that it, too, will be hiking the fees it charges customers to check luggage.

With the move, all four of the major US airlines, which together control about 80% of the US market, have now hiked their baggage fees in recent days amid surging jet fuel prices.

The change will go into effect on tickets bought on or after Thursday, the same day Southwest’s hike begins.

Since late March, JetBlue, Delta Air Lines, United Airlines, Canada’s WestJet, and Southwest have hiked their fees. Experts expect more major carriers to follow, and to potentially tweak the pricing of other ancillary revenue sources like seat assignments and carry-on luggage.

American Airlines updates bag fees and Basic Economy fares

The change will go into effect on tickets bought on or after Thursday, the same day Southwest’s hike begins.

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Less than a year after implementing them, Southwest is also hiking its bag fees

Southwest Airlines has joined the growing list of airlines opting to hike their bag fees amid sustained higher jet fuel costs.

Starting today, the first checked bag at the carrier — which implemented bag fees less than a year ago — will jump from $35 to $45, and the second from $45 to $55. Southwest quietly disclosed the change Tuesday.

Southwest assigned the decision to “part of an ongoing analysis of the business and against the evolving global backdrop.”

As of Wednesday, jet fuel prices dropped to $4.16 a gallon, per the Argus US Jet Fuel Index, down from $4.81 on Tuesday following President Trump’s ceasefire announcement, which sent travel stocks soaring. Major airlines have shed some of those gains in premarket trading Thursday.

With the move to hike bag fees, Southwest joins JetBlue, United Airlines, Delta Air Lines, and Canada’s WestJet, all of which also boosted fees this month. Experts expect more major carriers to follow, and to potentially tweak the pricing of other ancillary revenue sources like seat assignments and carry-on luggage.