Latest Inflation Numbers and Discussion

[almost there]

Wouldn't call it misleading, like you mentioned it affects everyone differently... however a homeowner with rental properties is not the "average" American.

Agree, but the numbers on this site are far from average. Ha Ha

"In 2018, 6.7% of individual tax filers (about 10.3 million) reported owning rental properties"

"Approximately 13.8 percent of the U.S. workforce is comprised of state and local employees who are eligible for retirement benefits from one of 299 state-administered or 5,977 locally-administered plans"

 

[NomDeER]

To me these numbers are so misleading. Inflation is different for almost everyone. It's 8.5 percent. But what is it for you?

For me, the largest part of inflation figures don't affect me. Shelter, new and used cars, furniture, apparel, on and on...I already have all that. My rent didn't go up because I own houses where the mortgage payments fell to 2.7 and 2.8 %. My rentals units got raises as tenants moved out and the market had shot the current rental rates up.

So I'm left with transportation costs, food, etc. Not a major deal for a lot of people like myself.

Yes, but the majority of people are not like yourself. 6.7% is a distinct minority. Most people do not have pensions, and many people with pensions don't have large ones or don't have COLAs. Inflations is a huge deal for many people not like you, and disproportionately so for lower income people. How about your tenants? How is it going for them? My rent is going up 20%. My neighbor was appalled by her increase but looked around and saw that very high rent prices are a problem everywhere so decided not to move. The leasing agent at my apartment complex said that they anticipate more vacancies because they have decided that they make more money by jacking up the rent a lot more and having some vacancies. I had two neighbors move out after receiving notices of rent increases of over 25%. One was a retiree who moved to another state to move in with family and one was a school teacher who moved in with his girlfriend.

The huge rent increases are not just happening with higher end apartments either. There are a lot of people who are going to have trouble paying the higher rents and paying higher utilities, higher gas bills to commute to work, clothes for growing kids, medications, etc. Those things are very high percentage of their net income.

There is pent up demand right now for certain services and people have been spending, sometimes even when they shouldn't. But, that can't last for people who aren't affluent, which is the majority of people. You combine the effects of high inflation with stock market declines and potential increases in unemployment and it won't be pretty. There will be ripple effects for a lot of people. If nothing else, the fear of what will happen economically is likely to deter a lot of people from spending. (I'm in that category.)

 

[braumeister]

Another inflation increase last month, up to 9% now.

 

[bloom2708]

9.1% for June. More pain a coming. I think everyone was hoping to see 4% or at least have the number decreasing. Oh well. Buckle up. At least it isn't winter yet.

 

[copyright1997reloaded]

9.1% for June. More pain a coming. I think everyone was hoping to see 4% or at least have the number decreasing. Oh well. Buckle up. At least it isn't winter yet.

There was no way we would have seen 4%. They would have been celebrating with a 8.4% print.

 

[Car-Guy]

9.1% for June. More pain a coming. I think everyone was hoping to see 4% or at least have the number decreasing. Oh well. Buckle up. At least it isn't winter yet.

Is anyone really surprised? It's a little higher than I expected but not by much. I expect many of the talking heads today will say the recent drop in oil prices isn't taken into account in these numbers and it really ins't that bad....

 

[ShokWaveRider]

CPI Inflation Number for June 9.1%

Watch the Rates rise. For us Savers and Fixed income investors (Not Bond funds), there is light. Maybe time to lock in long term MYGAs and CD's.

We secured a 4.3% 5 Year this week. Looking for a few more, may push our luck to 6 or 7 years. 5% is a live like a King and Queen number for us.

Stock Market does not like it either, but that could change by 3:30pm.

 

[copyright1997reloaded]

RT @charliebilello: Price increases over last year (CPI report)...
Fuel Oil: +98.5%
Gasoline: +59.9%
Gas Utilities: +38.4%
Electricity: +13.7%
Food at home: +12.2%
New Cars: +11.4%
Overall CPI: +9.1%
Transportation: +8.8%
Food away from home: 7.7%
Used Cars: +7.1%
Shelter: +5.6%
Apparel: +5.2%

For future CPI prints, while Gasoline prices have been trending down for the last 25 or so days (which would result in a lower print on that portion of the CPI calculation), 24% of the CPI calculation is "Owners Equivalent Rent". Because of the way this is calculated, it (OER) will likely continue to trend higher. It (the OER calculation in CPI) lags other rent indexes (e.g. Zillow), because things like Zillow look at current rents while the CPI OER looks at "rent" from the perspective of current owners already "renting" vs. looking for a new place to rent.

 

[Koolau]

9.1% for June. More pain a coming. I think everyone was hoping to see 4% or at least have the number decreasing. Oh well. Buckle up. At least it isn't winter yet.

I'm actually surprised it isn't higher. It FEELS higher, but YMMV.

 

[Car-Guy]

I'm just waiting for Powell to speak later this month and will probably start buying CD's again shortly after that.

 

[almost there]

Agree, and what's comical is what MSM is pointing to as its root cause.
At this point, I cant see any real reason for it to go down much.
Will have to see how it all plays out. I mean did anyone really think a fed rate of 1.5% to 1.75% would do anything? Maybe the media convinced folks that it could? Rates still artificially low, with high inflation. This is a 1st. So I do not believe that anyone really knows how this will end. As its a 1st time evolution.

 

[jazz4cash]

CPI Inflation Number for June 9.1%

What is the 4.3 five year instrument? CD, MYGA, or ? It would be helpful to others if you care to share. I don’t see this inflation news as good for savers. Rates are not going up enough to keep pace so we are going backwards. I agree locking in or laddering higher rates is a good move now.

 

[JoeWras]

I expect many of the talking heads today will say the recent drop in oil prices isn't taken into account in these numbers and it really ins't that bad....

So I don't have cable, but I have XM, and couldn't resist listening to CNBC. There were a variety of opinions. Cramer (yeah, I know) had a take that the numbers are bogus because around him he sees stuff dropping, like used cars.

Maybe that's true in his NY neighborhood, but in general used cars aren't exactly cratering. They are floating up and down month to month right now with no clear down trend yet.

Next month will be better because of commodities, but you gotta look at the core. The core is still accelerating. Core removes food and energy from the mix. Core month-to-month needs to start dropping. But it isn't yet. And I think a lot of that has to do with shelter. The shelter number is huge in the CPI calculation, but the way it is calculated involves a long lag. It is still absorbing last year's skyrocketing rise, and will continue to do so for the rest of this year.

 

[ShokWaveRider]

What is the 4.3 five year instrument? CD, MYGA, or ? It would be helpful to others if you care to share. I don’t see this inflation news as good for savers. Rates are not going up enough to keep pace so we are going backwards. I agree locking in or laddering higher rates is a good move now.

No worries, I have shared many times they are MYGAs. Here are a few.

https://www.immediateannuities.com/...&age=68&state=FL&filter_dma=5#dma-filter-form

 

[Sunset]

Watch the Rates rise. For us Savers and Fixed income investors (Not Bond funds), there is light. Maybe time to lock in long term MYGAs and CD's.

We secured a 4.3% 5 Year this week. Looking for a few more, may push our luck to 6 or 7 years. 5% is a live like a King and Queen number for us.

.....

Yep, happy days are here again, only losing 4.1% per year

 

[ShokWaveRider]

Yep, happy days are here again, only losing 4.1% per year

You have to play the long game (Well ~5year long game); all will stabilize in the fullness of time. It is one of those "If you won the game" things, 5% is a lot better than -15%. Our personal inflation rate is nowhere near 9.1%

 

[Freedom56]

The inflation report this morning is a lagging indicator. The bond market is looking past that report with the oil and other commodity bubbles bursting, gas prices dropping, a huge inventory buildup, and the USD rising. It is a good time for savers and fixed income investors. All those businesses that have been gouging consumers have created their own demand destruction. The short term profit gains are going to lead to longer term misery.

 

[jebmke]

The inflation report this morning is a lagging indicator. The bond market is looking past that report with the oil and other commodity bubbles bursting, gas prices dropping, a huge inventory buildup, and the USD rising. It is a good time for savers and fixed income investors. All those businesses that have been gouging consumers have created their own demand destruction. The short term profit gains are going to lead to longer term misery.

a lot of sales at local big boxes here. Back to school sales already started. They have too much stuff. Not a day goes by that I don't get an email from Best Buy or NewEgg with deeper discounts on computers and electronics. Can't speak to food -- my wife does all the food shopping. Can't speak to cars - I don't need one right now.

 

[Freedom56]

What is the 4.3 five year instrument? CD, MYGA, or ? It would be helpful to others if you care to share. I don’t see this inflation news as good for savers. Rates are not going up enough to keep pace so we are going backwards. I agree locking in or laddering higher rates is a good move now.

Would you rather earn 4.5% from an A rated 3 year corporate note or 1.3% from cash balances or a whopping 1.5% from short term bond funds and watch your capital erode at the same time?

You have to look at the big picture. How high can rates go with $30T in national debt and $54T in corporate debt? Zero rate policies create bubbles and hurt savers. A normalized rate environment will be better. It will be painful short term for bubble induced investments, but will be great for savers and fixed income investors.

 

[steelyman]

The I bond rates announced in May weren’t so far off after all.

 

[corn18]

Yeah! Bigger COLA!

 

[almost there]

Odd way of looking at it. )

 

[braumeister]

Threads merged.

 

[Chuckanut]

All those businesses that have been gouging consumers have created their own demand destruction. The short term profit gains are going to lead to longer term misery.

While I am not sure about the gouging comment, I do basically agree with you. I am hearing a lot of chatter among my peers about cutting back this, eliminating that, and finding a cheaper replacement for some other thing.

The Stella beer I bought is 20% cheaper and almost as good as the higher priced craft brew Session I was buying.

I am thinking of making a new horror movie called Gas and Groceries.

 

[Gumby]

The I bond rates announced in May weren’t so far off after all.

The I-bond rates are a simple calculation, and it is backward looking, not predictive. To wit: I-bond rate for May 2022 = ((CPI-U for March 2022/CPI-U for September 2021) x 2)-2

Yeah! Bigger COLA!

Based on the new numbers, Social Security COLA for 2023 will be 9% at least.