Tag Archive: Consumer Prices

Curve Inversion 101: US CPI Politics Up Front, China PPI Down(ing) The Back

2022-06-16

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2022-06-16

While the world fixated on the US CPI, it was other “inflation” data from across the Pacific that is telling the real economic story. Having conflated the former with a red-hot economy, the fact American consumer prices aren’t tied to the actual economic situation has been lost in the shuffle of the FOMC’s hawkishness, with markets obliged to price wrong-way Jay.

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Prices As Curative Punishment

2022-06-14

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2022-06-14

It wasn’t exactly a secret, though the raw data doesn’t ever tell you why something might’ve changed in it. According to the Bureau of Economic Analysis, confirmed by industry sources, US new car sales absolutely tanked in May 2022.

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“Inflation” Not Inflation, Through The Eyes of Inventory

2022-06-11

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2022-06-11

It isn’t just semantics, nor some trivial, egotistical use of quotation marks. There is an actual and vast difference between inflation and “inflation.” And in the final results, that difference isn’t strictly or even mainly about consumer prices.Who cares, most people wonder. After all, what does it really matter why prices are going up so far?

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Shipping Around Retail ‘Inflation’

2022-05-22

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2022-05-22

This whole “inflation” scenario isn’t really that difficult to piece together, effect from cause. Sure, Jay Powell’s trying to nuke it by hiking the federal funds rate, but no one really uses fed funds and the problem isn’t the unsecured cost of borrowing bank reserves (not money) that are literally overflowing.

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Synchronizing Chinese Prices (and consequences)

2022-05-14

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2022-05-14

It isn’t just the vast difference between Chinese consumer prices and those in the US or Europe, China’s CPI has been categorically distinct from China’s PPI, too. That distance hints at the real problem which the whole is just now beginning to confront, having been lulled into an inflationary illusion made up from all these things.

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Who’s Playing Puppetmaster, And Who Is Master of Puppets

2022-05-09

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2022-05-09

Cue up the old VHS tapes of Bill Clinton. The former President was renowned for displaying, anyway, great empathy. He famously said in October 1992, weeks before the election that would bring him to the White House, “I feel your pain.”What pain? As Clinton’s chief political advisor later clarified, “it’s the economy stupid.”

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Historic Inventory Continued In March, But Is It All Price Illusion, Too?

2022-04-28

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2022-04-28

The Census Bureau today released its advanced estimates for March trade. These include, among other accounts like imports and exports, preliminary results reported by retailers and wholesalers. That means, for our purposes, inventories. Oh my, was there ever more inventory. It was, apparently, widely expected that following an avalanche of goods building up over the previous five months the situation might calm down a touch.

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Not Good Goods

2022-04-24

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2022-04-24

The goods economy in the United States is – maybe was – the lone economic bright spot. That in and of itself should’ve provoked more caution, instead there was the red-hot recovery to sell under the cover of supply shock pricing changes. The sheer spending on goods, and how they arrived, each unabashedly artificial from the get-go.

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China More and More Beyond ‘Inflation’

2022-04-17

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2022-04-17

If only the rest of the world could have such problems. Chinese consumer prices were flat from February 2022 to March, even though gasoline and energy costs predictably skyrocketed. According to China’s NBS, gas was up 7.2% month-over-month while diesel costs on average gained 7.8%.

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You Know What They Say About The Light At The End Of The Tunnel

2022-04-14

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2022-04-14

In any year when gasoline prices rise 18%, that’s not going to be good for anyone except maybe oil companies who extract its key ingredient from out of the ground (or don’t, as the case can be). Yet, annual rates of increase that size do happen.

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US CPI Reaches Seven On US Goods Prices, With Disinflation Setting In Everywhere Else (incl. US Services)

2022-01-16

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2022-01-16

How is that US Treasury rates out in the independent longer end of the yield curve have now “suffered” a seven percent CPI to go along with double taper and triple maybe quadruple (if the whispers are to be believed) rate hikes this year, yet have weathered all of that allegedly bond-busting brutality with barely a market fluctuation?

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Testing The Supply Chain Inflation Hypothesis The Real Money Way

2021-12-18

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2021-12-18

Basic intuition says this is a no-brainer. Producer prices rise, businesses then pass along these higher input costs to their customers in the form of consumer price “inflation” so as to preserve profits. This is the supply chain hypothesis. Statistically, we’d therefore expect the PPI to lead the CPI.And this was expected for much of Economics’ history, taken for granted as one of those self-evident truths (kind of like the Inflation Fairy). After...

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Perfect Time To Review What Is, And What Is Not, Inflation (and why it matters so much)

2021-10-13

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2021-10-13

It is costing more to live and be, so naturally people are looking for who it is they need to blame. Maybe figure out some way to stop it. You know and feel for the basics since everyone’s perceptions begin with costs of just living. This is what makes the subject of inflation so difficult, even more so in the era of QE.

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Inflation Isn’t Just The Outlier, The Inflation In It Is, Too

2021-06-29

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2021-06-29

PCE Deflator Fed, Jan 2017 - June 2021
Following the same recent pattern as the BLS and its CPI, the Bureau of Economic Analysis’s (BEA) PCE Deflator ran up hotter in May 2021 than its already high increase during April. The latter’s headline consumer basket rose 3.91% year-over-year, its fastest pace since August 2008.

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Copper Corroding PPI

2021-06-17

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2021-06-17

Copper Futers, Continuous Frn Month, Jan 2002 - May 2021
Yesterday, lumber. Today, copper. The “doctor” has been in reverse for better than two months now, with trading in the current session pounding the commodity to a new multi-month low. Down almost $0.19 for the day, an unusual and eye-opening loss, this brings the cumulative decline to 9.2% since the peak way back on May 11.

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If the Fed’s Not In Consumer Prices, Then How About Producer Prices?

2021-01-16

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2021-01-16

U.S. CPI Services Core Fed, Jan 1985 - -2020
It’s not just that there isn’t much inflation evident in consumer prices. Rather, it’s a pretty big deal given the deluge of so much “money printing” this year, begun three-quarters of a year before, that consumer prices are increasing at some of the slowest rates in the data.

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Where Is It, Chairman Powell?

2020-11-15

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2020-11-15

CPI less Food & Energy, 1983-2020
Where is it, Chairman Powell? After spending months deliberately hyping a “flood” of digital money printing, and then unleashing average inflation targeting making Americans believe the central bank will be wickedly irresponsible when it comes to consumer prices, the evidence portrays a very different set of circumstance.

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The Prices And Costs Of What Xi Believes He’s Got To Do

2020-11-12

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2020-11-12

China Exports, 1995-2020
It does seem, at first, a huge contradiction. On the one hand, what we know so far of China’s 14th 5-year plan apparently will lean heavily on new technologies not-yet invented to rescue the country’s economy from the pit of de-globalization the eurodollar system had thrown it into years ago.

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Transitory, The Other Way

2020-07-18

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2020-07-18

After a record three straight months of decline for the seasonally-adjusted core CPI March through May 2020, it turned upward again in June. Buoyed by a partially reopened economy, the price discounting (prerequisite to the Big D) took at least one month off.

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If Trade Wars Couldn’t, Might Pig Wars Change Xi’s Mind?

2019-12-12

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2019-12-12

China Price Stability, 1996-2019
Forget about trade wars, or even the eurodollar’s ever-present squeeze on China’s monetary system. For the Communist Chinese government, its first priority has been changed by unforeseen circumstances. At the worst possible time, food prices are skyrocketing. A country’s population will sit still for a great many injustices. From economic decay to corruption and rising authoritarianism, the line between back alley grumbling and open rebellion is...

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