Latest Inflation Numbers and Discussion

[Gumby]

I just consult the Shang oracle bones.

 

[Koolau]

I just consult the Shang oracle bones.

Certainly better than listening to the talking heads on the financial porn shows.

 

[FREE866]

ALL NOISE. It's all just noise. Stay with your plan and ignore the reports and hysteria. Unless you plan to cash in your stash for a major BTD, don't worry about the noise. YMMV of course.

Exactly. So much noise out there.



This board is unique in that people have serious multi 7 figure and I believe even 8 figure portfolios so things like asset allocation really don't matter so much. However, for the average investor they'd be so much better off just turning off the news, not tinkering and having a heavy equity low cost index portfolio and doing nothing.

 

[eytonxav]

So given where we are, what projection do we have for the SS cola for this year?

 

[audreyh1]

Latest CPI report. Last 12 months inflation dropped to 4%.

https://www.bls.gov/news.release/cpi.nr0.htm

 

[latexman]

Hmmm, I bet the Fed pauses.

 

[Marc]

So given where we are, what projection do we have for the SS cola for this year?

No data yet. Determined by ratio of CPI-W for Jul/Aug/Sep versus previous year. 2022 Jul/Aug/Sep totaled to 875.702. So, if the total for Jul/Aug/Sep this year totals 901.97 then we would get 3% COLA.

As of report today CPI-W is 298.382 in May.

 

[Gumby]

So given where we are, what projection do we have for the SS cola for this year?

Social Security COLA is based on the average CPI-W for the 3rd quarter, year over year. In 2022, the average Q3 CPI-W was 291.901 As of today, it is 298.382 If prices do not change at all from here, the COLA will be 2.2% If we see 0.2 % monthly inflation between here and the end of September, the average Q3 CPI-W will be 300.176, which would result in a COLA of 2.8%

Latest CPI report. Last 12 months inflation dropped to 4%.

https://www.bls.gov/news.release/cpi.nr0.htm

Pretty much as I expected.

 

[explanade]

Latest CPI report. Last 12 months inflation dropped to 4%.

https://www.bls.gov/news.release/cpi.nr0.htm

Hmmm, I bet the Fed pauses.

Heard some handwringing the last few days as the S&P hit a multi-month high on anticipation of the Fed pause.

So if the Fed doesn't pause, look out below?

 

[Montecfo]

Sort of scratching my head. Jobs number came out Jun 2 and nonfarm payroll employment increased by 339,000 in May. Above the 190,000 consensus. Market up 700 points on strong economic data. Then today we get a hot print on jobless claims and,....market rallies.



I have no idea if good news is still good news or in fact bad news or if all news right now is good news.



Guess we'll see next week when CPI comes out and then if the Fed really pauses as expected.

The HH survey showed a loss of 300K jobs and unemployment rose to 3.7%. average work hours declined.

I think there is misinterpretation of why the market rallied after the unemployment report. I think it rallied because the mostly negative unemployment report meant a pause was likely.

The weekly jobless claims amplified that perception.

 

[audreyh1]

Latest CPI report. Last 12 months inflation dropped to 4%.

https://www.bls.gov/news.release/cpi.nr0.htm

Pretty much as I expected.

Will you add your 6 month inflation analysis? Much appreciated.

 

[Montecfo]

Core inflation rose 0.4% and 5.3% for the month and year, respectively. That was a slight decline from last month. It was in line with forecasts.

This is disappointing but apparently housing, which is surveyed 1/6 of the market at a time, was a big driver.

Rent increases continue to be flat to down in the real world so presumably this is stale data working its way slowly through the reporting.

 

[Car-Guy]

Hmmm, I bet the Fed pauses.

I'm now thinking it's a toss up at this point... Maybe a little stronger towards a pause than a week or so ago but still a toss up, IMO. Regardless, I think more important will be what he says/thinks about the near future (6 to 18mos) and when he sees rates starting to pull back.

 

[Marc]

I'm now thinking it's a toss up at this point... Maybe a little stronger towards a pause than a week of so ago but still a toss up, IMO. Regardless, I think more important will be what he says/thinks about the near future (6 to 18mo) and when he sees rates starting to pull back.

Dot plot also released tomorrow prior to news conference; to me, that will be most interesting news.

 

[Montecfo]

I'm now thinking it's a toss up at this point... Maybe a little stronger towards a pause than a week or so ago but still a toss up, IMO. Regardless, I think more important will be what he says/thinks about the near future (6 to 18mos) and when he sees rates starting to pull back.

It is remarkable how Fed predictions fail to be accurate. I do think their interest rate view is interesting, but they predicted rates would still be zero now and through end of 2023.

Their view to next meeting usually holds as they hate to contradict themselves.

 

[Koolau]

It is remarkable how Fed predictions fail to be accurate. I do think their interest rate view is interesting, but they predicted rates would still be zero now and through end of 2023.

Their view to next meeting usually holds as they hate to contradict themselves.

All pronouncements to the contrary, these guys aren't that smart. They're just in a j*b where they need to SOUND smart. IMHO Volker WAS the smartest and Greenspan THOUGHT he was the smartest. YMMV

 

[Gumby]

Will you add your 6 month inflation analysis? Much appreciated.

Sorry for the delay. I was working at the food pantry.
CPI-U for 11/22 was 298.012, so the annualized rate since then (without seasonal adjustment) is 4.1%.

 

[audreyh1]

Sorry for the delay. I was working at the food pantry.
CPI-U for 11/22 was 298.012, so the annualized rate since then (without seasonal adjustment) is 4.1%.

Interesting, about the same as the 12 month.

Thanks!

 

[Koolau]

It "feels" much higher, but my mix of goods and services is (admittedly) different from the CPI-U mix for calculation.

Some things lately have simply blown me away. One mechanic I've used because they are close wanted $95 to patch a nail hole in a tire. Say WHAT? (Got it free at a tire store apparently where it was originally purchased.) But airfare to the mainland was up 50% this year. That's an extra grand I wasn't planning on.

Insurance of all kinds is up - way up.

Heh, heh, Vanguard wants $25/account for mailing me stuff.

ON and on. Sorry, just venting - again.

 

[MichaelB]

All pronouncements to the contrary, these guys aren't that smart. They're just in a j*b where they need to SOUND smart. IMHO Volker WAS the smartest and Greenspan THOUGHT he was the smartest. YMMV

Well, “these guys” have managed to cut inflation in half and get it to just above 4% without a recession. That’s quite an achievement, one which no one thought possible a year ago. I’m don’t remember the last time the Fed was able to do that.

 

[jldavid47]

Well, “these guys” have managed to cut inflation in half and get it to just above 4% without a recession. That’s quite an achievement, one which no one thought possible a year ago. I’m don’t remember the last time the Fed was able to do that.

The opera ain't over 'til the fat lady sings.

 

[Involuntary Retiree]

The opera ain't over 'til the fat lady sings.

+1

 

[FiveDriver]

Well, “these guys” have managed to cut inflation in half and get it to just above 4% without a recession. That’s quite an achievement, one which no one thought possible a year ago. I’m don’t remember the last time the Fed was able to do that.

Michael, thank you for pointing that out to the Opera Buffs in the neighborhood.

So, is it possible (or even helpful) to do an estimate of the CPI-W change using the 2Q2022 3 month average vs 2Q2023 Estimated Average ??

CPI-W From BLS Website
April May June Average
2022 284.575 288.022 292.542 ~288.3
2023 297.730

https://www.ssa.gov/oact/STATS/cpiw.html

 

[Car-Guy]

All pronouncements to the contrary, these guys aren't that smart. They're just in a j*b where they need to SOUND smart. IMHO Volker WAS the smartest and Greenspan THOUGHT he was the smartest. YMMV

Let's remember he was saying over two years ago, that inflation was transitory and kept rates "near" zero. I "guess" transitory is really a relative term.


Of course I don't think I could have done any better. My crystal ball is really cloudy and I was never a good dart player.

 

[youbet]

Well, “these guys” have managed to cut inflation in half and get it to just above 4% without a recession. That’s quite an achievement, one which no one thought possible a year ago. I’m don’t remember the last time the Fed was able to do that.

And they did it in an era of stimulative federal spending and lingering COVID related benefits.