Latest Inflation Numbers and Discussion

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Ouch!

And shelter may not have cooled off yet. I still think a lot of this is due to the high cost of structure maintenance. Plumbing, HVAC, roofing (etc) materials and labor are baked into shelter and not broken out. I would bet if we saw what HVAC inflation is, it would be well above the CPI average. Roofing isn't too far behind.

I volunteer for the non-profit and have a lot of contact with trades, getting estimates and jobs done. I've seen their prices become more stable last year, but then they told me that Jan 1 they are raising prices again. (HVAC and concrete guy.) Concrete guy said it was due to price of rock from quarry rising.

I really wish stuff like roofing, plumbing, electrical and HVAC were broken out somehow in the CPI. We have no good visibility of this. But I get it. The way they calculate shelter compels them to have these things baked into shelter.
 
The producer price index came in at 0.4% which was higher than the forecast of 0.3%. The core PPI came in at 0.3% as expected.

But the bond market reacted positively to the report because of what is under the hood.

Notably, the all important core PCE is now expected to come in at 2.5% yoy, a decline from 2.6% in December.

A lot to digest.

 
Inflation? A local plumber I had used before wanted $1000 to install two toilets. Install! $2000 if they provide white commodes, which don’t match, or $3000 if they special order biscuit or almond or whatever…

Bought two from Home Depot, plus install, for $1000.
 
Flieger said:
This same argument can be made for ACA so many game their income to take advantage of, the rest pay for it.

Flieger
Click to expand...
So...

This hasn't been the case for us with the cliff suspension. However, if the cliff returns in 2026...

If income X means PTC of ~$10k and income X+$1 means PTC of $0, then darn right I'm going to "game my income" to keep as much of that $10k as I can. If "the rest of us" don't like that, they can advocate for a better system. In fact, I advocate for what I see as a better system - keep subsidies on a sliding scale instead of a cliff.

We'll see what happens...
 
Flieger said:
This same argument can be made for ACA so many game their income to take advantage of, the rest pay for it.

Fliege
Click to expand...
"Anyone may so arrange his affairs that his taxes may be as low as possible" as the great judge Learned Hand said.

To be fair though it is more commonly referred to as tax planning than income gaming.

;)
 
Flieger said:
This same argument can be made for ACA so many game their income to take advantage of, the rest pay for it.

Flieger
Click to expand...
I don't like subsidies but I don't see them as analogous to controlling income to stay away from cliffs but YMMV.
 
Well, seems that hit a nerve. Pot, meet kettle.

Flieger
 
ACA cliffs are a good way to derail inflation discussions so knock it off...
 
I stopped at TIMES grocery today on my way home from receiving steroid injections in my back (whole other story). I guess I wanted to treat myself to a nice meal after my painful ordeal.

The Deli has these wonderful, complete meals in a (used to be styro but now "paper") clam shell food tray. They had 3 of my (our) favorites. Corned beef with cabbage and potatoes. Roast pork and dressing. Crab stuffed white fish.

Each meal comes with 3 sides choices (mixed veggies, lettuce salad, mashed potatoes/gravy, white rice or Mac salad). I got all 3 choices as the mixed veggies since DW and I are both limiting our carbs. The "meat" portion is HUGE! The portions are easily enough for 2 meals. Each meal comes with a canned soda as well.

So here is the inflation part. These meals used to be (depending on the meal) either $6 or $7 each. Four years later, they are (wait for it) $10 or $12. Still a good deal, but price-inflated a LOT.
 
"so knock it off". I love that phrase! It isn't used enough anymore. Seriously. I mean no disrespect to the moderation that happened. I'm just observing how cool that phrase is, how well it works, and how well the usage of it identifies our age group, although my mom would say "Knock it off, buster!" I guess "Buster" adds emphasis. Do parents today tell their kids to knock it off? Ok, I'm continuing the train derailment.

Back to inflation...
 
I heard my mother coming with "the" belt.
 
We have had several weak economic readings here and bonds rallying.

Always feel we are just 1-2 tepid reports away from those cuts moving toward us.
 
If these deferred tariffs go into effect I feel like the market may view it as damaging to the economy and as recession risk. Bonds have been rallying in the face of tariff threat.

(Not making any political statements, just looking at the markets).
 
PCE for January was released this morning. This is the Fed’s preferred measure of inflation. The price index was up 2.5% over January ‘24 and core PCE was up 2.6% for the same period. Month over month, both increased 0.3%.

Personal incomes were up 0.9% while spending declined 0.2%. These monthly numbers are quite volatile and subject to revision, so one shouldn’t read too much into them.

See more here Personal Income and Outlays, January 2025 | U.S. Bureau of Economic Analysis (BEA)
 
I wish our marina used the fed's method. They have raised the moorage rates about 5% per year for the past 4 years.
 
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