Latest Inflation Numbers and Discussion

[aja8888]

May just came in at 8.6% and here is a nice and tidy recap of all the measured categories with charts.

Raging inflation. The costs of services continued to spike in May, which has been the thing to watch for months because it’s where consumers spend most of their money, and it’s unrelated to “transitory” spikes in commodities. This is where inflation is getting entrenched and will be hard and painful to dislodge, and it’s now front and center. Costs of gasoline and natural gas blew out; the cost of food spiked by over 10%, while inflation in used vehicles resumed their spike, after three months of declines, and new vehicle prices continued to surge.

I said a few days ago, while observing the reinvigorated spike in gasoline and diesel prices, “Inflation not in the mood of peaking yet,” and that’s what we’re seeing, but for reasons beyond gasoline.

The headline Consumer Price Index (CPI-U), released today by the Bureau of Labor Statistics, spiked on a month-to-month basis by 1.0% in May, the worst red-hot month-to-month spike in this entire red-hot inflation cycle, with no sign of peaking. Year-over-year, CPI spiked by 8.6%, the worst since 1981. And the Fed is going to have a field day with its rate hikes:

https://wolfstreet.com/2022/06/10/f...l-spike-dollars-purchasing-power-goes-whoosh/

 

[Chuckanut]

The Core inflation rate (for those of you who don't eat and don't require the use of energy) was only about 6%.

So the key to bringing down inflation is to stop eating, stop using energy to control your home's climate, commute, heat water for bathing, cooking, etc. Wait if you aren't eating you probably aren't cooking. That's a two-fer. Lucky you.

 

[Car-Guy]

Not surprising at all... We are all seeing significantly higher prices everywhere on everything... Scary to think about the impact on retired folks (or anyone for that matter) on fixed incomes and/or limited assets.

This could get serious for a lot of folks. Heck, at this time it's just news headlines for me, but it could get bad enough or last long enough to make me feel it.

 

[aja8888]

The Core inflation rate (for those of you who don't eat and don't require the use of energy) was only about 6%.

So the key to bringing down inflation is to stop eating, stop using energy to control your home's climate, commute, heat water for bathing, cooking, etc. Wait if you aren't eating you probably aren't cooking. That's a two-fer. Lucky you.

I'll get DW right on the things you mention above. I bet we could go a week without eating, but I'l still have to feed the dog, unless he gets his game in gear and catches a squirrel or two. It's also not that hot here (100+ F) so no more A/C (can open windows when needed).

 

[GenXguy]

8.6% sounds bad enough, but that is actually low compared to what I'm seeing in the real world for my cost increases while trying to cut back wherever I can.

 

[aja8888]

8.6% sounds bad enough, but that is actually low compared to what I'm seeing in the real world for my cost increases while trying to cut back wherever I can.

Everyone I know is seeing very high prices. Don't forget, the CPI numbers are massaged and are weighted.

 

[NW-Bound]

The Core inflation rate (for those of you who don't eat and don't require the use of energy) was only about 6%.

So the key to bringing down inflation is to stop eating, stop using energy to control your home's climate, commute, heat water for bathing, cooking, etc. Wait if you aren't eating you probably aren't cooking. That's a two-fer. Lucky you.

Well, remember the warning from NERC (North American Electric Reliability Corporation) about possible rolling blackouts this summer?

There's a silver lining for us. No worry about high cost of energy, because we may not get any!

 

[Montecfo]

I found the numbers disappointing after showing some early signs of peaking previously.

And now further attempts to punish Russia currently under discussion will make things worse, including an oil spike to $200 a barrel, some say.

That would definitely slow the economy, especially with higher interest rates.

It seems it is becoming a slog.

 

[copyright1997reloaded]

Are we having fun yet?

 

[aja8888]

Are we having fun yet?

I just got back from getting groceries. No fun yet. Gas station this weekend and no fun there either!

 

[Car-Guy]

There's a silver lining for us. No worry about high cost of energy, because we may not get any!

Well on the positive side, the last person out of the building won't need to remember to turn off the lights anymore.

 

[NW-Bound]

Well on the positive side, the last person out of the building won't need to remember to turn off the lights anymore.

Alright!

And about water shortage, though it's not because of inflation but the drought, any day now, homeowners in the West will receive a bill of $0 for water, with an explanation: "Due to no water having been delivered, there's no charge for last month".

 

[aja8888]

Alright!

And about water shortage, though it's not because of inflation but the drought, any day now, homeowners in the West will receive a bill of $0 for water, with an explanation: "Due to no water having been delivered, there's no charge for last month".

They will still have the service fee!

 

[NW-Bound]

They will still have the service fee!

The city plumbing is still intact, is it not? So, of course you still have to pay certain fees.

It's the same when you have rolling blackouts. The wires don't carry electric juice, but if the power poles are still standing, the service charge has to stay.

 

[unclemick]

Are we having fun yet?

Actually yes. But I kinda miss the 70's and early 80's when I was 'younger'.

The bad news back then was that evil curse - 'WORK!!!'

Grin

Heh heh heh - ER'd since 1993. It hasn't been boring.

 

[copyright1997reloaded]

Actually yes. But I kinda miss the 70's and early 80's when I was 'younger'.

The bad news back then was that evil curse - 'WORK!!!'

Grin

Heh heh heh - ER'd since 1993. It hasn't been boring.

Same.

I started my career (after college) in 1978. It seems like we are back in those times. But as quite a few have mentioned it was a great time, as we were young and regardless of what was going on were likely having fun.

Fast forward to now: I think a good movie to re-watch over the weekend is The Big Short.

 

[GenXguy]

Well, remember the warning from NERC (North American Electric Reliability Corporation) about possible rolling blackouts this summer?

There's a silver lining for us. No worry about high cost of energy, because we may not get any!

Sadly, half my electrical bill is just being attached to the grid, even if I don't use any electricity.

 

[madatrub]

Silver linings? Sans Energy and Food, inflation has looked as if it's peaked.

 

[ShokWaveRider]

Notice how Gas prices are sky high and rising but funny how there are no shortages. I am sure the oil companies and refineries are loving it.

 

[NW-Bound]

Sadly, half my electrical bill is just being attached to the grid, even if I don't use any electricity.

Up in my 2nd home, my bill is usually about $41-42. Out of that total, $31 is the fixed charge. The only thing drawing power is the fridge.

The fixed charge in my metropolitan home is lower at $20.

I think the difference in the fixed charges is due to the population density. At the high-country boondocks home, houses are spaced out and there's weather hazard in the winter that can knock out utility poles.

 

[luckydude]

The Core inflation rate (for those of you who don't eat and don't require the use of energy) was only about 6%.

So the key to bringing down inflation is to stop eating, stop using energy to control your home's climate, commute, heat water for bathing, cooking, etc. Wait if you aren't eating you probably aren't cooking. That's a two-fer. Lucky you.

So if we don't eat and we don't drive and we don't use any energy, there's zero inflation. Problem solved!

See, there's a solution to every problem. We just have to think outside the box (or pretend that the problem is "transitory" and doesn't exist).

 

[aja8888]

Notice how Gas prices are sky high and rising but funny how there are no shortages. I am sure the oil companies and refineries are loving it.

Yes, the refineries and oil companies are loving the gasoline and diesel prices and margins.

Actually, the natural gas producers and some midstream companies are loving it too. Don't need refining to produce natural gas.

 

[Katsmeow]

The Core inflation rate (for those of you who don't eat and don't require the use of energy) was only about 6%.

So the key to bringing down inflation is to stop eating, stop using energy to control your home's climate, commute, heat water for bathing, cooking, etc. Wait if you aren't eating you probably aren't cooking. That's a two-fer. Lucky you.

In all seriousness, I do think there is a personal inflation rate which varies a lot from person to person. Take gasoline. There was a time when I had a long commute for work and we spent a LOT of money on gas. Now, we get a tank of gas every couple of months. Yes, of course, I notice who that tank now costs $25 more than it used to. But, when I fill it every 6 weeks or so it is not that big a deal. Back when I was filling my car multiple times a week that increase would have been quite material.

Same thing on energy for the house. Back when I lived in a 4500 SF house with outbuilding our electric bill was a lot. Now, we are in a smaller house with a heat pump. Yes, I noticed my cost has gone up but it is not that much proportionate to our other expenses.

I pay no attention to increases in used or new cars because we are not in the market for either.

Don't get me wrong. There are things that I notice that have gone up. All I am saying is that the impact can vary a lot from person to person.

 

[Turbo29]

Silver linings? Sans Energy and Food, inflation has looked as if it's peaked.

What they should say is, "Once we have stripped out the items that have really gone up and left the items in the index that haven't gone up that much, inflation isn't that bad."

 

[Car-Guy]

Notice how Gas prices are sky high and rising but funny how there are no shortages. I am sure the oil companies and refineries are loving it.

Don't say that to loud... I remember the shortage(s) and gas lines back in the 70's. That's something I don't want to go through ever again. Maybe that's why I don't mind paying whatever it cost.