Latest Inflation Numbers and Discussion

[DJRR]

I suspect I'm supposed to ask you to elaborate on the last sentence.

No. If you've lived in corporate world you know the realities of protecting your people, if not it does not matter.

 

[Montecfo]

There has been a lot of positive inflation news recently and signs suggesting the market may see interest rates as peaking.

This week jobless claims rose to their highest level in two years though still low.

But then I saw this: Walmart CEO says prices of some good are falling and they are preparing to cut prices of some goods..

"In the US, we may be managing through a period of deflation in the coming months", he said.

He mentioned specifically eggs, chicken, seafood and pantry staples.

In my view, this may be another signpost pointing toward lower rates.

https://www.cnbc.com/2023/11/16/deflation-holiday-walmart-ceo.html

 

[CaptTom]

It's already happened. Lots of food items have come down off their peaks. Not surprising, and frankly, not "deflation" in any real sense. When they go below where they were before the spike, then you can ring the "deflation" bell. Until then, click bait.

 

[JoeWras]

Food commodities and gasoline energy are down. A lot of the food inflation was baked in due to fertilizer increases, which are now a distant memory.

Now, when my auto repair guy only charges $300 for a dual axle simple pad-change brake job instead of $1300, then I'll believe inflation is over.

 

[COcheesehead]

Hotels are coming down, gas is down. There are buying incentives reappearing on certain cars.
I am seeing hard to get wines now appearing on the discount sites.
I just compared our year over year expenditures and with similar travel and “fun” we are down about $20k in spending. Why? We don’t eat out nearly as much as we used to. Our health insurance cost dropped. We went from gold to bronze with an HSA.
So our personal inflation is down, while our investment income is up due to the rise in rates.

 

[Fermion]

Our health insurance cost dropped. We went from gold to bronze with an HSA.
So our personal inflation is down, while our investment income is up due to the rise in rates.

That is sort of like saying our car insurance decreased because I cancelled it and walk.

 

[COcheesehead]

That is sort of like saying our car insurance decreased because I cancelled it and walk.

No it’s not. We still have coverage and maybe even better. Our personal expense for health insurance dropped based actions we took. That is an example of managing personal inflation. Decisions you make.

 

[Fermion]

No it’s not. We still have coverage and maybe even better. Our personal expense for health insurance dropped based actions we took. That is an example of managing personal inflation. Decisions you make.

Still sounds like switching from steak to hamburger but that is how personal inflation works I guess.

 

[COcheesehead]

Still sounds like switching from steak to hamburger but that is how personal inflation works I guess.

You obviously don’t understand the triple benefits of an HSA.

 

[Fermion]

You obviously don’t understand the triple benefits of an HSA.

Oh, I do, we just don't have the income right now to make that a good option over the silver plans. Back in the day making $300k HSA was the way.

We now return to the regularly scheduled thread.

 

[MichaelB]

We now return to the regularly scheduled thread.

Great news!

 

[explanade]

Chinese economy being slow may be pushing oil prices down.

We don't track the action of other central banks or inflation metrics in other countries as much.

US has been doing better than Europe and developing countries.

But it would be good to see global commodity prices lowering inflation in other countries.

In the last 1-2 weeks, the dollar has fallen, which could be a reflection of anticipated lower relative interest rates in the US versus other countries.

 

[Koolau]

There has been a lot of positive inflation news recently and signs suggesting the market may see interest rates as peaking.

This week jobless claims rose to their highest level in two years though still low.

But then I saw this: Walmart CEO says prices of some good are falling and they are preparing to cut prices of some goods..

"In the US, we may be managing through a period of deflation in the coming months", he said.

He mentioned specifically eggs, chicken, seafood and pantry staples.

In my view, this may be another signpost pointing toward lower rates.

https://www.cnbc.com/2023/11/16/deflation-holiday-walmart-ceo.html

Yeah, and I saw Walmart's stock took a hit yesterday on news that they see sales being softer this Christmas. Doesn't bode well for the stock, but may mean lower prices (finally.) YMMV

 

[Koolau]

Food commodities and gasoline energy are down. A lot of the food inflation was baked in due to fertilizer increases, which are now a distant memory.

Now, when my auto repair guy only charges $300 for a dual axle simple pad-change brake job instead of $1300, then I'll believe inflation is over.

Or $50 instead of $110 for a lousy oil change!

 

[Montecfo]

In the last 1-2 weeks, the dollar has fallen, which could be a reflection of anticipated lower relative interest rates in the US versus other countries.

I think it reflects falling current treasury yields over that period.

 

[Montecfo]

Rate of inflation continues to decline, economy slowing

The PCE index was flat at 0.0% in October compared to 0.4% in September. The annual figure fell to 3.0%.

The Fed's favored measure, the so called "core" PCE which excludes food and energy fell to 0.2% in October versus 0.3% in September. The annual figure was 3.5% .

The attached provides some analysis and link to BEA release.

The piece also notes continuing claims for unemployment have spiked to the highest level in 2 years. These are signs of a slowing economy.

https://www.cnbc.com/id/107341234?&view=story?__source=androidappshare

 

[JoeWras]

Last night, after we watched some favorite shows, I flipped to PlutoTV and "The Price is Right" was on. What was special was that they were showing some episodes from 1972, so actually it was "The New Price is Right." Pluto usually sticks to 1982 through 1985.

Wow, just wow!

Chevy Vega: $2900. Chevy Nova: $3500

Various TVs: $500 to $1000

Dishwashers: $500 (A "Lady Kenmore" brand no less, geez)

Peculator Coffee Pot: $29

Couch/Sofa: $900

What struck was the number of items that have stayed the same, or decreased in price. The TVs were ridiculously priced back then. Major appliances have remained very consistent through the decades. Of course, they are now throw away items. The coffee pot today of similar quality is only a few dollars more.

Furniture: most has been off-shored and now is cheaper.

Cars: woah! Now these stick out like a sore thumb. Of course, we get a lot more for the money, but still.

It was very interesting to watch for both the prices and clothing styles. Whoa again!

My point in all this? Inflation by specific items is very uneven in this global world.

 

[pb4uski]

Last night, after we watched some favorite shows, I flipped to PlutoTV and "The Price is Right" was on. What was special was that they were showing some episodes from 1972, so actually it was "The New Price is Right." Pluto usually sticks to 1982 through 1985.

Wow, just wow!

Chevy Vega: $2900. Chevy Nova: $3500

Various TVs: $500 to $1000

Dishwashers: $500 (A "Lady Kenmore" brand no less, geez)

Peculator Coffee Pot: $29

Couch/Sofa: $900

What struck was the number of items that have stayed the same, or decreased in price. The TVs were ridiculously priced back then. Major appliances have remained very consistent through the decades. Of course, they are now throw away items. The coffee pot today of similar quality is only a few dollars more.

Furniture: most has been off-shored and now is cheaper.

Cars: woah! Now these stick out like a sore thumb. Of course, we get a lot more for the money, but still.

It was very interesting to watch for both the prices and clothing styles. Whoa again!

My point in all this? Inflation by specific items is very uneven in this global world.

Yes, the only thing that sticks out like a sore thumb are vehicles... much more expensive but not outrageously so considering inflation between 1972 and now. That $3,500 for a Nova in 1972 would be ~$26,000 in today's dollars. A 2023 Chevy Malibu base model retails for $25,345 ($25,000 MSRP + $1,045 destination charge - $750 cash incentive)... and the Malibu is a much nicer car than the Nova ever was.

TVs are much better and less expensive. Ditto dishwashers and coffee brewer.

 

[MichaelB]

In addition to thr things that are less expensive today, there are consumer items that we don’t even have to pay for because they’re included on smartphones. Remember that ad from Radio Shack?

 

[Chuckanut]

As long as we are discussing inflation from way back when, here are three ads for annuities from 1950, 1954 and 1961. I'll let you do the hard work of labeling each ad with the proper year.
I wonder what the monthly number for a similar carefree retirement would be today.

 

[JoeWras]

and the Malibu is a much nicer car than the Nova ever was.

True.

Although I have to admit when I saw that Nova on display, it brought back a flood of memories. Just nostalgia, though.

A co-worker was restoring a Nova from that period and he'd occasionally drive to lunch. He'd say, "Who wants to drive in the death trap?" No kidding. Sharp edges, hard surfaces and metal everywhere. Lap belt only. Luckily, we all made it there and back in for many lunches. The bonus was we got to listen to the AM radio.

 

[GrayHare]

Old Price is Right episodes make for a serious test of inflation knowledge. I learned a microwave oven cost almost as much as a car in 1972. Of cars, it wasm't until around 1980 that Price is Right gave away anything but low end models. Then today I saw a news report about people with big houses and new, fancy EVs complaining that they can barely scrape by on their salary.

 

[Chuckanut]

Then today I saw a news report about people with big houses and new, fancy EVs complaining that they can barely scrape by on their salary.

That does not surprise me. I remember a lot of couples who 'got out of Dodge' during the 2007-2008 crash of housing prices and other fun things. They had huge debts to match their huge incomes. When they lost one of the incomes, even if it was the smaller of the two, they were finished, done for, and went POOF! into the outer darkness.



Several Big Money people at my church gave the keys to their house to the bank and left town. Turns the house, fancy cars, trips to all over the world were all done on leases and/or borrowed money.

 

[Fermion]

Houses are the biggest shock. My parents bought a nice 2500 sq-ft lake house in the 1980s for about $23,000.

 

[Koolau]

As long as we are discussing inflation from way back when, here are three ads for annuities from 1950, 1954 and 1961. I'll let you do the hard work of labeling each ad with the proper year.
I wonder what the monthly number for a similar carefree retirement would be today.

I don't know what the monthly number would be in similar ads, but it struck me that those figures ($200 to $250 to $300) would now be "comfortable" DAILY spending. Wow.