Latest Inflation Numbers and Discussion

audreyh1 said:
Well it looks like inflation is trending back up to me as last month the 12 month inflation was 2.7%. 12 month inflation has been trending up since the last September low of 2.4%.View attachment 53900
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Definitely not what we want to see to pile on to all the high inflation we've had to date. :(
audreyh1 said:
It sure will be nice if that sticky shelter component continues declining.
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I haven't seen it anecdotally or from people I know. Homeowner's insurance keeps going up in big chunks every year along with a steep property tax increase in 2024. And from what I'm hearing in recent days, homeowner's insurance is going to go up even more. :cry:
 
Montecfo said:
Obviously the core rate is telling a different story which is why we have a core rate.

Also importantly, the shelter component is declining now which has been a sticking point.
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The core rate is certainly an informative statistic, but most of us still have to eat and still use energy. In my area the four biggest threats to my long term financial well being are taxes, food, insurance, and energy. Not necessarily in that order. I doubt if the core rate catches more than one of them (insurance).

.
 
audreyh1 said:
Wow, had no idea!
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"21 Metros of 33 are down from their 2022 peaks: In 21 of the 33 MSAs, home prices were down from their respective peaks in mid-2022, with two of them down by the double digits: the metros of Austin (-22.6%) and San Francisco (-10.6); and two of them down about 9%: Phoenix (-9.2%) and San Antonio (-8.7%).

No New highs in December: No MSA here of the 33 MSAs made a new high in December. Even prices in the New York City metro dipped for the second month, after the huge uninterrupted run-up."

 
Chuckanut said:
The core rate is certainly an informative statistic, but most of us still have to eat and still use energy. In my area the four biggest threats to my long term financial well being are taxes, food, insurance, and energy. Not necessarily in that order. I doubt if the core rate catches more than one of them (insurance).

.
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The reason we have core CPI (and even more to the point, core PCE) is because food and shelter pricing is volatile from month to month and adds noise that is less helpful in understanding the underlying trend.

But of course all the items in the basket are still tracked and useful.

And the good news is food and energy prices have risen less than other prices over the past year, which is why the core CPI remains higher than the headline CPI. And energy prices have actually declined year over year.
 
Markets had been down for a few weeks.

They were looking for a buying opportunity. I think some banks must have reported positive results. Goldman Sachs was up 5% this morning.

Earning seasons coming that will tell the toll.

Right now, there are all kinds of egg shortages because of the avian flu outbreak which has affect very high proportion of herds.

So you'd expect to hear a ton of complains on social media about that and grocery prices in general but the election is over so maybe not so much.
 
Let's leave immigration and politics out. Please.
 
From Reuters

  • Personal Consumption Expenditures Price Index up 0.3% in December
  • PCE inflation rises 2.6% on year-on-year basis
  • Core PCE up 0.2%; gain of 2.8% on year-on-year basis
  • Consumer spending jumps 0.7%; income advances 0.4%
  • Labor costs increase 0.9% in fourth quarter
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The quarterly Employment Cost Index was also released today. This number is an important input to Fed assessment.

Total compensation and benefits costs increased by 0.9% in 4Q 24 and 3.8% YoY. See the report here.

Compensation costs continue to decline, but the growth rate is still above ‘19 levels and the rate of decline may be slowing. It’s a healthy number that shows continued economic growth but also continues to show moderate upward inflationary pressure. It doesn’t support a significant change in interest rates.
 
It appears that if the trend on shelter continues inflation will reach the target without too much strain.

Whether it will stay there is another matter.
 
Get ready for inflation to take off again if the ill advised tariffs actually take place. Insane. On a positive note, it could bring me better CD rates! :)
 
DallasGuy said:
Get ready for inflation to take off again if the ill advised tariffs actually take place. Insane. On a positive note, it could bring me better CD rates! :)
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It is interesting how this all might pan out for me and her.

I'll continue to earn better than 4% on cash. But the value eggs at BJs sold out after my order was placed. And the order for Kleenex was cancelled too. I believe the run on paper products will heat up again.
 
DallasGuy said:
Get ready for inflation to take off again if the ill advised tariffs actually take place. Insane. On a positive note, it could bring me better CD rates! :)
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I read that the Fed is not worried about tariffs because they constitute a fixed one time change in pricing at most, not an ongoing increase in pricing. So potentially I'm inflationary bur but on an ongoing basis.

May or may not be true but upon analysis that seems right.

The larger issue I think is the potential damage to world economies. But it seems most countries have benefitted more from free trade than the US has (since US is a net importer, trading partners are net exporters). Or to put it differently, free trade has been too much of a one-way street.
 
DallasGuy said:
Get ready for inflation to take off again if the ill advised tariffs actually take place. Insane. On a positive note, it could bring me better CD rates! :)
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Overall, I want lower inflation. And I will gladly take more modest interest rates, My modest pension has a capped COLA. The last three years it has fallen behind the overall COL. People who rely on a fixed pension will suffer even worse.

Thankfully, I am a SS at 70 kind of guy. So that will offer me some protection. Win some, lose some.
 
I've been trying to think what things I purchase that would be significantly affected by tariffs. I don't buy cars. Most vegies likely come from California. Meat is shipped from midwest. I don't need any consumer electronics (just bought my new Mac a month or two ago.)

Fuel, maybe? I buy about $50 worth of gas every 6 weeks or so?? Some of that blend might come from Canada or Mexico.

What am I missing?
 
I have a small business. One of my suppliers is Canadian, and I just got their email that they will be increasing prices after next week for the extra 25%. If I use their (lovely, unique) products in my items, I'll have to pass that on, that's just math.
 
Koolau said:
I've been trying to think what things I purchase that would be significantly affected by tariffs. I don't buy cars. Most vegies likely come from California. Meat is shipped from midwest. I don't need any consumer electronics (just bought my new Mac a month or two ago.)

Fuel, maybe? I buy about $50 worth of gas every 6 weeks or so?? Some of that blend might come from Canada or Mexico.

What am I missing?
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I saw a report the other day ( may have been local Arizona projected increases) but it had gas rising over 70c to $1/gal as we import oil from MX. 90% of avocados come fro MX. Peppers. Gas already up ~10c/gal in the last week to $2.67/gal.
 
DallasGuy said:
Get ready for inflation to take off again if the ill advised tariffs actually take place. Insane. On a positive note, it could bring me better CD rates! :)
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No doubt. 25% inflation in some instances. I consider it the inflation tax.
 
AudiDudi said:
I saw a report the other day ( may have been local Arizona projected increases) but it had gas rising over 70c to $1/gal as we import oil from MX. 90% of avocados come fro MX. Peppers. Gas already up ~10c/gal in the last week to $2.67/gal.
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Audi, can you link a copy of what you read abouth the oil imported from Mexico?

I was in the oil and gas business for 30+ years and understood that we do import crude from Mexico to primarily refine it at the Houston Ship Channel refineries and send it back as gasoline due to their poorly maintained refineries. They also are short on refining capacity overall. I doubt this practice will impact U.S. gasoline prices.

BTW, we are entering the summer driving season where summer gasoline is currently being refined to meet increased demand later this year. Those summer formulations are more costly in some areas due to Clean Air Act requirements, so pricing will go up to accommodate the increased refining costs.

We (the U.S.) is currently the largest crude oil producer in the world and we export some crude, gasoline, diesel and lubricants products worldwide. We also export a huge amount of LNG through several Gulf and East Coast terminals.

Crude oil, nat gas, gasoline, other refined products are commodities and worldwide demand and supply numbers dictate pricing.
 
Aerides said:
I have a small business. One of my suppliers is Canadian, and I just got their email that they will be increasing prices after next week for the extra 25%. If I use their (lovely, unique) products in my items, I'll have to pass that on, that's just math.
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Seems like pretty simple math to me. Why don't so many seem to grasp that concept?
 
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