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Posted on 9/13/22 at 8:02 am to Civildawg
The food increase has come down a little month over month. Electricity and natural gas as a utility are what have really gone up since July.
We do seem to be leveling off so at some point the year over year numbers are obviously going to plummet and we'll see if the bullwhip effect from supply glut multiplies that drop. The question then will be whether the Fed will back off hikes too soon.
We do seem to be leveling off so at some point the year over year numbers are obviously going to plummet and we'll see if the bullwhip effect from supply glut multiplies that drop. The question then will be whether the Fed will back off hikes too soon.
Posted on 9/13/22 at 8:04 am to NC_Tigah
quote:
CPI is up. Inflation 8.3% vs 8.0% est.
What is crazy (to me) is that they were expecting deflation of -0.2%.
According to CPI (which is a separate conversation as to its accuracy in measuring true inflation), there has been almost 0 inflation over the last 2 months. July was 0.0% change and August was +0.1%.
Of course people use the 12 month inflation because it is much more meaningful than just small monthly incremental changes but you could have 6 months of 0 inflation and the 12 month inflation rate would still be 5.2% because the inflation from Jan - Jun 2022 was so high. In reality at that point you would think inflation is under control because we would have gone 1/2 a year without any inflation. This does not mean overall cost of living will drop but that it isn't rising like before.
The real kicker is that energy is keeping CPI lower than it would otherwise be but gas can only go so low. I don't foresee $0.50/gal gas therefore the benefit of lowering gasoline prices will have diminishing returns in keeping CPI down. Overall as a consumer, I am much happier seeing 0.0% in July and +0.1% in August than probably the market considering we were basically averaging almost +1% a month the 5 months prior.
Posted on 9/13/22 at 8:06 am to NC_Tigah
Yikes
This is bad
This is bad
Posted on 9/13/22 at 8:13 am to Diseasefreeforall
quote:OK. But the food index is still up significantly.
The food increase has come down a little month over month
quote:
Increases in the shelter, food, and medical care indexes were the largest of many contributors to the broad-based monthly all items increase. These increases were mostly offset by a 10.6-percent decline in the gasoline index. The food index continued to rise, increasing 0.8 percent over the month as the food at home index rose 0.7 percent.
LINK
Posted on 9/13/22 at 8:16 am to NC_Tigah
Member when y’all were like all they want to do is get married
Posted on 9/13/22 at 8:17 am to NC_Tigah
quote:
The food index increased 0.8 percent in August, the smallest monthly increase in that index since
December 2021.
Still inflating but at the lowest rate of the year so far. Of course we may never see 2019 prices again but the first goal should just be to get the inflation back under control. Trends appear to be moving in the right direction but it isn't a cliff. A cliff would probably be bad anyways because what it would mean overall for the economy.
Posted on 9/13/22 at 8:18 am to bod312
quote:
Trends appear to be moving in the right direction but it isn't a cliff. A cliff would probably be bad anyways because what it would mean overall for the economy.
Those are my thoughts. I think you want it to be soft and not a cliff.
Posted on 9/13/22 at 8:19 am to el Gaucho
quote:
Member when y’all were like all they want to do is get married
IDK WTF this means, but it sounds funny.
Posted on 9/13/22 at 8:23 am to lsu13lsu
quote:
Those are my thoughts. I think you want it to be soft and not a cliff.
Yeah if we get rapid deflation then something will have to give with the wage increases that have happened. Sharp deflation would likely mean massive layoffs.
Posted on 9/13/22 at 8:31 am to Diseasefreeforall
quote:
Sharp deflation would likely mean massive layoffs.
Absolutely a large cliff would only happen with a spike in unemployment. Obviously maybe a little faster slowing of inflation might be better but overall the trend appears to be starting to go back in the right direction. This of course could change quickly but at least its starting to move in the right direction.
Posted on 9/13/22 at 9:06 am to bod312
A spike in unemployment is the goal if we're being honest
Posted on 9/13/22 at 9:12 am to wutangfinancial
quote:
A spike in unemployment is the goal if we're being honest
That is a possible solution but not necessarily the goal, in my opinion. They could easily cause that spike if they wanted but I think they still believe a soft landing is possible. A slowing of the economy without completely wrecking it is the goal from my understanding.
Posted on 9/13/22 at 9:25 am to Civildawg
quote:
We have started planning our meals around sale items
Preach! We are doing the same. First time in my life. Just started about a month ago.
This post was edited on 9/13/22 at 9:26 am
Posted on 9/13/22 at 9:32 am to bod312
quote:
According to CPI (which is a separate conversation as to its accuracy in measuring true inflation), there has been almost 0 inflation over the last 2 months. July was 0.0% change and August was +0.1%.
You have to keep in mind that it's the average of a ton of different things and some of those are measured in a manner which skews them downwards (like OER and quality adjustments). Gasoline and fuel oil in the report showed big drops in price for July, enough that they were the primary reasons (by far) for CPI to balance to zero for the month. In August they swapped positions (as to which dropped more) but both are reported as having dropped less (as a total sum) than in July.
A quick glance at the graphs seems to indicate energy's overall drop was driven by the drop in gasoline. Natural gas is still trending up and will continue to do so due to increasing demand from Fall and Winter months (exacerbated by Europe's extra demand).
I think the problem here is with how their organize their Energy subcategories for weighting overall Energy. I say this because both gasoline/diesel and electricity are foundational expense drivers. Increases in these have a compounding impact on everything else that I don't think their current setup takes into account. (I would really need to dig into the numbers to confirm this though, but I don't have that sort of time at the moment)
Posted on 9/13/22 at 9:35 am to Diseasefreeforall
quote:
massive layoffs.
And already occurring
Goldman Sachs massive layoffs. Expect more from Wall Street
This post was edited on 9/13/22 at 9:38 am
Posted on 9/13/22 at 9:40 am to wutangfinancial
quote:
A spike in unemployment is the goal if we're being honest
I think "goal" isn't the right word as it implies the ultimate destination, the goal is to get inflation back to the 2% range. With their current strategery for getting back to there, a spike in Unemployment would just be a signal that they are on the right track and that it's time to begin easing up on rate increases.
Posted on 9/13/22 at 9:42 am to GeneralLee
quote:You’re wicked smart for letting your cash disappear at 8%+ like a fart in the wind. Do you have a newsletter?
Futures dropped like 700 points in a few minutes, lol. Glad to be sitting on lots of cash.... come to daddy!
Posted on 9/13/22 at 10:20 am to alpinetiger
quote:quote:
Futures dropped like 700 points in a few minutes, lol. Glad to be sitting on lots of cash.... come to daddy!
You’re wicked smart for letting your cash disappear at 8%+ like a fart in the wind. Do you have a newsletter?
Okay, Cramer.
Posted on 9/13/22 at 10:39 am to alpinetiger
quote:
You’re wicked smart for letting your cash disappear at 8%+ like a fart in the wind
Let's see... market is down about 15-20% for the year so I think my dollars, even inflation adjusted, can buy more shares in the indices now than on 1/1/2022. My main holdings are cash, SpaceX, and ORGN. Will redeploy cash into the indices and more ORGN once S&P is in the 3,000-3,500 range here later this fall.
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