Latest Inflation Numbers and Discussion

[explanade]

I think the GDP print for Q2 was in the higher range of forecasts.

So if they want a recession to stop the "services inflation," Fed may not be done yet.

 

[11522914]

The Fed's favored inflation gauge, the PCE deflator, rose just 3% annually in June, down sharply from 3.8% in May and the lowest level in more than two years.

The employment cost index came in below expectations at just 1% suggesting wage inflation is moderating.

Treasury yield are down across the board this am.

Key Fed inflation rate falls to lowest annual rate in nearly 2 years

https://www.cnbc.com/2023/07/28/pce-inflation-june-2023-.html?__source=androidappshare

I believe the Fed's favored inflation gauge is the "Core" PCE which is running 4.1%. Definite improvement from 4.6% the previous month but still over twice their 2% goal.

Also there are some changes coming later this year that may result in higher inflation prints (Health Insurance) and services inflation is still running hot. Oil is also up 12% from closing price at end of June.

I believe we will see an uptick in inflation in the last quarter of 2023. But as our beloved Koolau would say YMMV

 

[Montecfo]

I think you are correct. Good point.

Same trajectory.

 

[Montecfo]

Yellow Trucking idles 30,000 largely union workers in what will be largest trucking bankruptcy in history.

Cautionary tale for the economy? Not sure but notable.

Trucking Giant Yellow Shuts Down Operations https://www.wsj.com/articles/the-fa...y-yellow-is-on-the-verge-of-collapse-3724f662

 

[Bigdawg]

Yellow Trucking idles 30,000 largely union workers in what will be largest trucking bankruptcy in history.

Cautionary tale for the economy? Not sure but notable.

Trucking Giant Yellow Shuts Down Operations https://www.wsj.com/articles/the-fa...y-yellow-is-on-the-verge-of-collapse-3724f662

https://www.cbsnews.com/news/yellow-corp-shutting-down-bankruptcy-heres-what-happened/

This story isn't behind a paywall and no need to set up a free account to access.

 

[Montecfo]

Thanks BigDawg!

 

[explanade]

Apparently the company made some mistakes and some long time customers had started shifting their shipping to other companies.

Company was like 100 years old. Not clear all those truck drivers will find jobs right away.

But they're just shutting down operations, not going to do what the airlines did, which was to discharge their debts and emerge out of Chapter 9 or 11 years later?

 

[Popeye]

Apparently the company made some mistakes and some long time customers had started shifting their shipping to other companies.

Company was like 100 years old. Not clear all those truck drivers will find jobs right away.

But they're just shutting down operations, not going to do what the airlines did, which was to discharge their debts and emerge out of Chapter 9 or 11 years later?

They made a few acquisitions and were “integrating”. Some of us know how that usually goes. They delayed a pension funding payment and the Teamsters threatening to strike. So everybody moved their freight elsewhere.

I read something about them planning to sell off pieces. Sounds like their toast.

 

[Montecfo]

They did a sale/leaseback of terminals with another carrier providing funding years ago. I think the carcass will be divied up and smaller better run carriers expanding but who knows?

Had trouble competing given unionized workforce when competitors were nonunion.

 

[explanade]

Apparently they got big covid relief loans, like $700 million or something like that.

They weren't able to pay it back.

 

[CaptTom]

Years ago, one of my young children asked me:

"Why do they call them Yellow trucks, when the sign is orange?"

From the mouths of babes...

 

[Koolau]

Years ago, one of my young children asked me:

"Why do they call them Yellow trucks, when the sign is orange?"

From the mouths of babes...

And here I feel stupid because I don't recall ever hearing of Yellow!

 

[Montecfo]

Was also Roadway Express

 

[Koolau]

Was also Roadway Express

Ah, I feel better now. THAT one, I know. That's a big outfit indeed.

 

[dobig]

ADP payrolls up 324k vs 175k estimate. Rates inching up.

 

[Montecfo]

ADP payrolls up 324k vs 175k estimate. Rates inching up.

Last month rates climbed a bit on an all too strong ADP report. Then came the BLS jobs report which was much more benign and rates fell back.

Will be interesting to see if history repeats.

 

[NW-Bound]

I don't know what happens next but feel that we are close enough to the end of the Fed tightening regime.

To that end, I have started to buy a bit of long bonds. Very little, only so that the position shows up on my Quicken screen along with other things. Hopefully, I will remember to look at it and to add to the position as the economy cools.

I am moving from 5% short-term Treasury to a 4% long bond yield, so only give up a little bit.

 

[audreyh1]

I don't know what happens next but feel that we are close enough to the end of the Fed tightening regime.

To that end, I have started to buy a bit of long bonds. Very little, only so that the position shows up on my Quicken screen along with other things. Hopefully, I will remember to look at it and to add to the position as the economy cools.

I am moving from 5% short-term Treasury to a 4% long bond yield, so only give up a little bit.

Watch out for Bill Ackerman shorting 30 yr treasuries. He likes to talk up his book a lot. Maybe he’ll drive down the price for you. https://www.early-retirement.org/fo...-bonds-discussion-115186-111.html#post2966615

 

[aja8888]

I don't know what happens next but feel that we are close enough to the end of the Fed tightening regime.

To that end, I have started to buy a bit of long bonds. Very little, only so that the position shows up on my Quicken screen along with other things. Hopefully, I will remember to look at it and to add to the position as the economy cools.

I am moving from 5% short-term Treasury to a 4% long bond yield, so only give up a little bit.

Just buy TLT if you think interest rates will turn south.

 

[Montecfo]

Watch out for Bill Ackerman shorting 30 yr treasuries. He likes to talk up his book a lot. Maybe he’ll drive down the price for you. https://www.early-retirement.org/fo...-bonds-discussion-115186-111.html#post2966615

Traders have been massively short the 10 year for several weeks. Now there is a face to it.

They did same thing in 2018 and lost their shirts.

Will be interesting.

 

[NW-Bound]

Just buy TLT if you think interest rates will turn south.

I have a couple of others too. I am slowly accumulating.

 

[JoeWras]

Jobs report is out. Mostly flat. Although creation was down slightly, so was participation. Wage pressure continues in the 4.5% range or so.

I admit, the few times I listen to CNBC (on XM) are on these reports. Steve Liesman was wringing his hands over the over 55 participation rate. Basically, we old people are not coming back, and the question is why? Will this cause continued wage pressure? The demographic continues to age and without participation in this group, employment will be challenged.

My opinion is that many of the over 50 group were treated poorly and not valued. If anything, "Let's hire young people!" Waddya expect?

Hey Steve, why don't you join us. The water is nice. (He's almost exactly my age.)


The topic of this thread is "inflation," and in my opinion, this report is just more of the same so don't expect the Fed to change their stance based on this.

 

[bobandsherry]

My opinion is that many of the over 50 group were treated poorly and not valued. If anything, "Let's hire young people!" Waddya expecc?

You might be onto something. [emoji12] And couple that with many in that age group worked hard and saved for tomorrow vs blowing everything for a "today experience".

 

[Montecfo]

Jobs report is out. Mostly flat. Although creation was down slightly, so was participation. Wage pressure continues in the 4.5% range or so.

I admit, the few times I listen to CNBC (on XM) are on these reports. Steve Liesman was wringing his hands over the over 55 participation rate. Basically, we old people are not coming back, and the question is why? Will this cause continued wage pressure? The demographic continues to age and without participation in this group, employment will be challenged.

My opinion is that many of the over 50 group were treated poorly and not valued. If anything, "Let's hire young people!" Waddya expect?

Hey Steve, why don't you join us. The water is nice. [emoji23] (He's almost exactly my age.)


The topic of this thread is "inflation," and in my opinion, this report is just more of the same so don't expect the Fed to change their stance based on this.

Only hint was job growth below expectations and June revised downward.

 

[NW-Bound]

You might be onto something. [emoji12] And couple that with many in that age group worked hard and saved for tomorrow vs blowing everything for a "today experience".

On the other hand, I keep reading that the typical US retiree does not have a lot of money, unlike the fat cats on this forum.

When their money is spent, say goodbye to inflation.