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Started By
Message
CPI Cooling for the 3rd Month in a row
Posted on 7/11/24 at 7:39 am
Posted on 7/11/24 at 7:39 am
quote:
BREAKING: June CPI inflation rate falls to 3.0%, below expectations of 3.1%. Core CPI inflation fell to 3.3%, below expectations of 3.4%. This marks the 39th consecutive month with inflation at or above 3%. It's also the 3rd straight month with declining CPI inflation.
quote:
Traders now have around 73% odds for a rate cut by September
Perfect timing
6
Posted on 7/11/24 at 7:48 am to SDVTiger
quote:awesome, just one more percentage to go! Keep raising rates.
June CPI inflation rate falls to 3.0%
Posted on 7/11/24 at 7:51 am to SDVTiger
The damage has already been done, the inflation rate could cool to 2% by tomorrow and people would still feel like their purchasing power has declined by way too much over the last few years due to wages not keeping up.
This:
Is still a major problem since they target 2-2.5%. 3% isnt 6% but inflation still hasnt cooled nearly enough. It was 3% CPI in Jun 2023 and year later t's still 3% with every month inbetween being higher than 3%.
And again these are the government reported numbers which arent necessarily reality for a lot of folks. They claim their basket of groceries is up 1.1% over the last year, we can sit here and
This:
quote:
This marks the 39th consecutive month with inflation at or above 3%.
Is still a major problem since they target 2-2.5%. 3% isnt 6% but inflation still hasnt cooled nearly enough. It was 3% CPI in Jun 2023 and year later t's still 3% with every month inbetween being higher than 3%.
And again these are the government reported numbers which arent necessarily reality for a lot of folks. They claim their basket of groceries is up 1.1% over the last year, we can sit here and
This post was edited on 7/11/24 at 7:53 am
Posted on 7/11/24 at 8:00 am to thunderbird1100
Everything you said is true. It is also true that the new numbers are good news. It is coming down and the trend is in the right direction.
Posted on 7/11/24 at 10:25 am to SDVTiger
Q2 GDP should be interesting as I believe it's going to come in negative (if not, it should be damned close to it). If that happens, then inflation likely isn't really cooling so much due to liquidity drain (which is really what's needed) as it is due to the cumulative effect of continued high inflation, combined with high debt servicing, causing consumers to buy fewer items (thus increasing supply by decreasing demand).
This is good news, but only in the vein of saying it's better to lose two fingers than three.
This is good news, but only in the vein of saying it's better to lose two fingers than three.
Posted on 7/11/24 at 11:16 am to Bard
quote:
Q2 GDP should be interesting as I believe it's going to come in negative (if not, it should be damned close to it).
It was already revised down from 3.5 to 1.5 prediction
You could be right
Posted on 7/11/24 at 12:29 pm to SDVTiger
It's close to impossible for gdp to go negative when the deficit spending is 7% of gdp.
Posted on 7/11/24 at 12:32 pm to Art Blakey
Inflation isn’t the telling statistic any longer. Unemployment ticking up will push us into a recession if they aren’t careful.
Posted on 7/11/24 at 12:58 pm to lynxcat
The recession is always 6 months away.
Posted on 7/11/24 at 1:03 pm to Art Blakey
quote:
It's close to impossible for gdp to go negative when the deficit spending is 7% of gdp.
I don't think there's a choice. As Unemployment, inflation AND consumer debt creation all continue to rise (read: for Unemployment, this is despite an estimated $1.84T federal deficit this year), consumer spending must lessen eventually due to a decrease in consumer funds. The longer that point is pushed back through higher consumer debt creation (especially with interest rates ranging from generational to historic highs), the harder and faster the eventual spending cut will happen once that trigger point is reached.
This post was edited on 7/11/24 at 1:36 pm
Posted on 7/11/24 at 1:40 pm to SDVTiger
I hate the YoY inflation rate. We are still looking at ~+20% since 2019 and that's a conservative estimate because the CPI is a trash reference to reality.
Posted on 7/11/24 at 2:55 pm to thunderbird1100
quote:
And again these are the government reported numbers which arent necessarily reality for a lot of folks.
Do you question the numbers only because a democrat is president or do you question them always.
If the latter then the numbers mean something relative to the mean. Otherwise, it doesn’t matter if you question them.
Fwiw- it’s very easy to verify the numbers and there are private sector companies that track these things
Posted on 7/11/24 at 3:26 pm to evil cockroach
quote:
awesome, just one more percentage to go! Keep raising rates.
Inflation could actually be zero, the Fed just decided 2% was an amount people would tolerate
Posted on 7/11/24 at 4:01 pm to SDVTiger
I'll pile on RE: some already made comments. For the average income person or family costs have grown substantially than their incomes over the last four years.
Yes, a slowing is normally good, but in this case can also be a sign of consumer failure when the consumer ability to spend (especially discretionary items) has been lost by the average Joe and Jane. Their housing, food, and energy/transportation costs are too high to afford more discretionary items. That's a reasonable interpretation of the data on median savings and credit card debt.
Recessions are typically back dated (see the GFC) but the revised jobs data probably mean we are already in a recession that started in October of 2023. The market would typically not fall until the yield curve uninverts and the Fed belatedly lowers rates
Yes, a slowing is normally good, but in this case can also be a sign of consumer failure when the consumer ability to spend (especially discretionary items) has been lost by the average Joe and Jane. Their housing, food, and energy/transportation costs are too high to afford more discretionary items. That's a reasonable interpretation of the data on median savings and credit card debt.
Recessions are typically back dated (see the GFC) but the revised jobs data probably mean we are already in a recession that started in October of 2023. The market would typically not fall until the yield curve uninverts and the Fed belatedly lowers rates
Posted on 7/12/24 at 4:25 am to molsusports
quote:There hasn’t been a recession, and it’s not even close.
revised jobs data probably mean we are already in a recession that started in October of 2023
Posted on 7/12/24 at 5:42 am to buckeye_vol
quote:
There hasn’t been a recession, and it’s not even close.
Agreed, but that's not a good thing in this scenario. Consumers have exploded their debt in order to try offsetting inflation, they are falling behind and it's eating into more and more of their discretionary spending while interest rates on debt servicing are sky-high. In this, it's too bad we don't have a U-GDP (GDP measured by unit sales) to see if unit sales are falling even though GDP hasn't gone negative since 2022.
Posted on 7/12/24 at 8:00 am to Bard
quote:I'm not doubting you but where can I get that information? I'd appreciate a link to it. Thanks!
Consumers have exploded their debt
EDIT: I think I found the data. Is this what you're referring to?
Federal Reserve Bank of New York - HOUSEHOLD DEBT AND CREDIT REPORT (Q1 2024)
quote:
Household Debt Climbs to $17.69 Trillion in First Quarter; Delinquency Rates Rise Again
Total household debt rose by $184 billion to reach $17.69 trillion, according to the latest Quarterly Report on Household Debt and Credit. Mortgage balances increased by $190 billion to $12.44 trillion, while balances on auto loans climbed $9 billion to $1.62 trillion, continuing their upward trajectory.
Credit card balances declined, as is typical for the first quarter, falling by $14 billion to $1.12 trillion.
Nearly 9 percent of credit card balances and 8 percent of auto loans (annualized) transitioned into delinquency.
If so, it appears almost all of the increase in household debt is from an increase in mortgage loan debt. Wouldn't that be from people borrowing to buy houses and not necessarily from borrowing to pay household bills?
In fact, credit card balances actually fell last quarter.
EDIT2: The % increase in household debt was only 1.05%. Was that really seeing consumers "exploded their debt"??
This post was edited on 7/12/24 at 8:16 am
Posted on 7/12/24 at 8:22 am to Bard
quote:
an estimated $1.84T federal deficit this year
I don't have a source to quote but have heard several talking heads claim the US is borrowing $1T every hundred days this year.
Posted on 7/12/24 at 8:47 am to buckeye_vol
quote:
revised jobs data probably mean we are already in a recession that started in October of 2023
There hasn’t been a recession, and it’s not even close
We will see that defined retroactively. As it always is with economic data.
It isn't as visible to most of the upper quarter of the population. If you own stocks and property those values have appreciated enough to buffer your economic stress.
GDP has not fallen because the GDP calculations include government spending. In theory a New Deal type of massive spend control be a positive for the economy but we are at the point where (paraphrasing Lacy Hunt) the positive productive effect of government spending is outweighed by the increased expenses of paying for the debt.
This isn't an ethical issue, just an economic problem when we have too much leverage. We're past the point of easily borrowing to improve today's prosperity.
Posted on 7/12/24 at 9:10 am to Thundercles
quote:
Inflation could actually be zero, the Fed just decided 2% was an amount people would tolerate
Inflation isn’t a bad thing when it’s related to a corresponding increase in economic output. 2-2.5% is roughly the sweet spot.
When inflation outpaces economic output or they run in opposite directions (stagflation), then it’s a bad thing.
“Target inflation” isn’t a measure of what we’ll tolerate. It’s the balance point for GDP expansion/economic output and inflation.
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