re: Consumer prices rose 7.1% last month compared to a year ago

Not shocking.

Honestly consumer spending is up less than that. So we are in a stagflation cycle where it appears that consumer spending is up slightly, but it's up because inflation is forcing additional spending on basic necessities. The quality of life and spending power of the average consumer is down.

We need to bring back the misery index. This is a huge problem.

quote:

---

But ABC News told me this was good news this morning.

---

When a loaf of bread or a stick of butter is up 40%, consumers have to spend 40% more.

ABC will report that as good economic news because consumer are spending more - ignoring that wages are not increasing and layoffs are starting to occur in multiple industries. Usually they'd be right that consumer spending increases are a sign of economic growth. In this case the inflated prices are masking real economic issues, and both fiscal and monetary policy makers are not adjusting quickly enough.

Congress and The Fed have both been miles behind these trends for a while. They were late in addressing inflation, and now they are going to be late in tempering rate hikes.

The media's coverage of economic issues differs based on who is in office at the time. When GDP was up 4.1% and inflation was under 2%, they barely covered it because the cheeto was in the White House. But when we have two consecutive quarters of negative GDP growth in 2022 that still couldn't be propped up by increased spending on inflated goods.....we get crickets.

quote:

---

fricking $4 for large eggs that were barely over a dollar not long ago

---

You just spent $4 when last year you only spend $1.

The government and their media lackies will claim that this is great economic news.

It's crazy people are celebrating this. Even if it's "slowing" its still scorching hot inflation.

Here's what they aren't acknowledging when they tout this: 7.1% is the average increase for November 2022 prices over November 2021 prices. November 2021 prices were up 6.8% over November 2020 prices.

That's an increase of ~14% in just two years. Along with that, MoM increase was still .1%. As long as MoM is still steadily increasing, we aren't to the middle of the downturn yet (thus aren't in the "turned the corner" territory).

Unemployment remains at incredible lows (at 3.7%) and job creation continues to be strong. Until these change and we start seeing combined CPI (from the current and previous year) consistently below double digits, we're still fighting an uphill battle.

The Fed is expected to stick with the .5 hike this week, bringing the FedFund to its highest rate in well over a decade (since 2007).

As I mentioned to a friend a few minutes ago, the longer we go with good job numbers while inflation is still high and rates increase, the more I have the feeling that a house of cards is getting taller and taller.

Fun fact, the BLS CPI has changed over the years to reflect cost of "living" than just cost of goods. The old CPI is nearly double the current one.

quote:

---

Fun fact, the BLS CPI has changed over the years to reflect cost of "living" than just cost of goods. The old CPI is nearly double the current one.

---

One of the most important changes was in Shelter (housing). They moved completely from home prices to OER (basically, the rent-equivalent the home owner would be paying to rent their home instead of having the mortgage). On the national level, rent changes far more slowly than home prices thus this has skewed CPI down (especially over the last decade when the housing market has been red hot).

quote:

---

only went up 0.1% - 0.2% month over month which is in the range of what we want. We don't want major deflation

---

Look, I think Joe Biden sucks as bad as anyone. But, 0.1% is getting to where the Fed will be very happy.

All I know is that I paid $4.50 for eggs last week and they were $5.23 this week.