Latest Inflation Numbers and Discussion

[Gumby]

Did you see there was a fish in there? - a tiny guppy - so product was loaded. Clearly a practical joke.

Not to those of us who love a tiny guppy sauté with a nice lemon butter sauce.

 

[Winemaker]

Not to those of us who love a tiny guppy sauté with a nice lemon butter sauce.

With an ice cold Albarino!

 

[JoeWras]

I mostly use the web interface, but I noticed that the last linked picture becomes the title picture on the mobile app. I didn't mean for my practical joke picture to become the meme for that thread.

 

[Montecfo]

PPI came in at 0.2% for April versus 0.3% expected and 0.4% registered for March.

Headline annual PPI was 2.3%, lowest since January of 2021.

Another sign that inflation is easing.

https://www.cnbc.com/2023/05/11/who...han-estimate-as-inflation-pressures-ease.html

 

[Montecfo]

Weekly jobless claims rose by 22k to 264k. Highest level since late 2021.

"The sharp Increase may mean that the labor market is about to turn over".

https://www.usnews.com/news/economy...s-surge-to-264k-highest-level-since-late-2021

 

[GenXguy]

Inflation would have to run 0% for quite a few years to make up for the massive amount of inflation over the last 2 to 3 years.

And no sign of seeing it slow yet. Just in the last month for annual bills, homeowner's insurance up 21%, property tax around 5%, grocery items higher with every trip, utilities, car insurance, etc.

Even at 6%, that is 300% of the target. Inflation lowering a little doesn't mean prices are dropping, they are still going up, just not skyrocketing as quickly as they had been.

 

[Gumby]

..... Inflation lowering a little doesn't mean prices are dropping, they are still going up, just not skyrocketing as quickly as they had been.

Not necessarily. If prices had remained exactly the same since the end of last October (so six months with prices remaining the same), then you wouldn't say prices "are still going up." And yet, reported year on year inflation in the April 2023 CPI report would have been 3.1% Actually, prices could have dropped 1% in the last six months and we would still be above the Fed's 2% target in reported year on year inflation.

 

[mf15]

Things are out of hand. Ford dealer 2010 Escape,replace muffler and a piece of tail pipe.
1150 bucks, not that the muffler is bad it is the built in bracket that hold it. I need to find the engineer that deigned the system and have a small talk with him/her.
Oldmike

 

[Car-Guy]

IRMAA threshold has pretty much locked in at 206,000 for MFJ (with four months to go). YoY rates will continue to go down through June and then bounce back up in July and August as last summer CPI-U (unadjusted) was flat for summer. Still waiting for news reports after June CPI report.

Useful related reference with 2024 IRMAA projections https://thefinancebuff.com/medicare-irmaa-income-brackets.html

I'm finally starting to feel "comfortable" that I can stay under the lowest IRMAA tax bar. Took some work and pain for a few years. Now if they just don't change the rules.

 

[Montecfo]

Inflation would have to run 0% for quite a few years to make up for the massive amount of inflation over the last 2 to 3 years.

And no sign of seeing it slow yet. Just in the last month for annual bills, homeowner's insurance up 21%, property tax around 5%, grocery items higher with every trip, utilities, car insurance, etc.

Even at 6%, that is 300% of the target. Inflation lowering a little doesn't mean prices are dropping, they are still going up, just not skyrocketing as quickly as they had been.

Well headline PPI at 2.3% and CPI at 4.9% (10th straight monthly drop) suggests prices are not skyrocketing.

But yeah general price levels usually do not drop except in a contraction of the economy, which is likely coming.

 

[Montecfo]

Things are out of hand. Ford dealer 2010 Escape,replace muffler and a piece of tail pipe.
1150 bucks, not that the muffler is bad it is the built in bracket that hold it. I need to find the engineer that deigned the system and have a small talk with him/her.
Oldmike

Get other quotes. I had similar quote on 2007 Camry from dealer. Cost me 200 bucks at my trusted mechanic.

 

[mf15]

Too late,state insp. I know I know,take to Midas or local mechanic much cheaper. Then have to get reinspected. Bad design, normally could fix with 2 dollar clamp in the old days. Been fixing cars since I was about 12. LOL
Oldmike

 

[GenXguy]

Well headline PPI at 2.3% and CPI at 4.9% (10th straight monthly drop) suggests prices are not skyrocketing.

But yeah general price levels usually do not drop except in a contraction of the economy, which is likely coming.

I did say they were not skyrocketing like they were before, just still going up quickly year over year, like 21% for homeowner's insurance, and I've heard a lot more than that from some others reporting increases over 30%.

And we would need years of 0% inflation to make up for the very high inflation over the last 2+ years to get the average annual to 2% starting with this time period of massive inflation. Of course, that's not going to happen. It's like a completely different world now, even if inflation gets back to 2% eventually.

 

[GenXguy]

Get other quotes. I had similar quote on 2007 Camry from dealer. Cost me 200 bucks at my trusted mechanic.

Just over four years ago, I had a catalytic converter and flex pipe replaced on one of those for $550 (that's including tax). From what I hear, it's more like $1500+ to have that done now after all this inflation.

 

[audreyh1]

Dealers replace whole systems, not smaller components. Makes their job easier but costs way more.

 

[Montecfo]

I did say they were not skyrocketing like they were before, just still going up quickly year over year, like 21% for homeowner's insurance, and I've heard a lot more than that from some others reporting increases over 30%.

And we would need years of 0% inflation to make up for the very high inflation over the last 2+ years to get the average annual to 2% starting with this time period of massive inflation. Of course, that's not going to happen. It's like a completely different world now, even if inflation gets back to 2% eventually.

It is human nature to cherry pick what seem to be the most outrageous price increases. But the data suggest such examples are not the rule.

Then again, I always shop my insurance but large price increases there can be regional (tied to recent weather trends) or "catch-up" in nature.

Construction costs have begun to come down but remain one of the stickier areas for pricing.

 

[Gumby]

It is human nature to cherry pick what seem to be the most outrageous price increases. But the data suggest such examples are not the rule....

Indeed. If we picked bacon as our measure, we have had rampant deflation over the past year. Prices are down 8.9% year over year. Don't like bacon? How about smartphones? Down 20% over the past year. Car and truck rental? Down 11.2% year over year.


Source: https://www.bls.gov/news.release/cpi.t02.htm

 

[GenXguy]

Indeed. If we picked bacon as our measure, we have had rampant deflation over the past year. Prices are down 8.9% year over year. Don't like bacon? How about smartphones? Down 20% over the past year. Car and truck rental? Down 11.2% year over year.

Source: https://www.bls.gov/news.release/cpi.t02.htm

I look at all my expenses in determining how this has affected me, not just one bill.

Just bought bacon today. The price was decent because it was on sale, but it was only 12 oz instead of 16 oz.

I rather these low cost items had gone up more instead of all my biggest bills, and that will include some very expensive required home maintenance items. Anyway, sadly, I'm working AT LEAST two extra years because of high inflation we have already experienced.

 

[Bigdawg]

Too late,state insp. I know I know,take to Midas or local mechanic much cheaper. Then have to get reinspected. Bad design, normally could fix with 2 dollar clamp in the old days. Been fixing cars since I was about 12. LOL
Oldmike

No gas station sushi and NO service at the dealer. My only exception is DW's new cars. They are all under warranty and it's all covered. My new (at least 10 years old) cars are all fixed by me or my local guy. He let's me buy my own parts and he love actual cash.

 

[Bigdawg]

I look at all my expenses in determining how this has affected me, not just one bill.



I rather these low cost items had gone up more instead of all my biggest bills, and that will include some very expensive required home maintenance items. Anyway, sadly, I'm working AT LEAST two extra years because of high inflation we have already experienced.

My big 3 are still home, auto and chow. Home-small increase in insurance, auto-diesel is way down from $6 to $3.55, chow-eating at home more and eating less red meat (less eggs too). COLA pensions so we are some of the lucky ones.

 

[Montecfo]

I look at all my expenses in determining how this has affected me, not just one bill.

Just bought bacon today. The price was decent because it was on sale, but it was only 12 oz instead of 16 oz.

I rather these low cost items had gone up more instead of all my biggest bills, and that will include some very expensive required home maintenance items. Anyway, sadly, I'm working AT LEAST two extra years because of high inflation we have already experienced.

Well, this bout of inflation, though damaging, is mild and has been very short compared to what many of us remember from the 1970s.

But you do have to make sure your financial plans reflect the possibility of higher inflation. If your plans are derailed by this, be aware you can't assume inflation will be mild over your planning horizon. By then it is too late to work longer.

 

[ShokWaveRider]

Eggs are down to $1.75 a dozen for Large Eggs.

 

[JoeWras]

Things are out of hand. Ford dealer 2010 Escape,replace muffler and a piece of tail pipe.
1150 bucks, not that the muffler is bad it is the built in bracket that hold it. I need to find the engineer that deigned the system and have a small talk with him/her.
Oldmike

Just over four years ago, I had a catalytic converter and flex pipe replaced on one of those for $550 (that's including tax). From what I hear, it's more like $1500+ to have that done now after all this inflation.

This is no small thing when it comes to inflation! Automobile repairs are seeing pressure from many angles.

A lot of people on this board don't deal with older cars, so this problem is hidden from them. Or they have the means to buy EVs, which we are still in the process of understanding what battery replacement means as a fleet of older EVs finally comes to play (greater than 10 years old).

The problem is that these high maintenance costs hit the poorest hardest. They can "afford" an old car, then find it can't pass state inspection. That affordable $4k car now needs $2k worth of repairs just to pass state inspection.

And yeah, I'm looking at catalytic converters specifically. The cost is even more in CA and NY which have a higher standard of catalytic converter (more precious metal).

Dealers replace whole systems, not smaller components. Makes their job easier but costs way more.

True. Dealers are out of control. But this problem doesn't go away with independents. They are raising their prices too. And parts are through the roof regardless. You can get a catalytic converter in a state other then NY or CA for less than $400, but the amount of catalyst in it is maybe enough to last 30k miles. Perhaps that is OK for a car end of life with one more year. Maybe not. A dealer won't put on such an aftermarket part. And it still isn't a cheap repair because many cars require 2 converters, so it quickly becomes $1k minimum. Dealers will just require OEM and that easily becomes $1500 to $2500 depending on the number of converters.

We have a problem with working poor affording transportation and it is not getting better with this inflation cycle.

 

[GenXguy]

Well, this bout of inflation, though damaging, is mild and has been very short compared to what many of us remember from the 1970s.

I went through the 70's. All this inflation builds on that inflation and all of the inflation since the 70's.

Of all the news and conversation I've heard about this massive inflation we've had in the last few years, over 400% of the target rate year over year for a while, I don't think I've ever heard anyone use the word "mild" to describe it. It's cost me a "multiple" of $100,000's in purchasing power in quick order. That's not something easily planned for.

My plans were to have well in excess of what I've needed. I don't want to go backwards in standard of living and plans for retirement, so that's why I'm working longer, not because of any lack of planning. I've been saving 80%+ some years.

 

[GenXguy]

And yeah, I'm looking at catalytic converters specifically. The cost is even more in CA and NY which have a higher standard of catalytic converter (more precious metal).

I've never had to have any emission testing of cars here during my lifetime, but the pipe that was part of the catalytic converter had a hole in it, plus flex pipe was bad. These were after-market parts done by a private auto repair shop. So, I was replacing them due to noise. Yeah, could be worse if a dealer put in OEM parts. Another thing is that sometimes people just steal these catalytic converters from cars. Happened in a family member a while back. Apparently drilling into gas tanks is a thing with such high gas prices these days, but I don't know of anyone personally that has been a victim of that crime.