Inflation hits new 40 year high with report out July 13th. another on July 29

The only thing transitory is the slowing down of inflation. It will pick back up.

 

Buccees in daytona finally under $4

 

There are signs inflation is easing beyond today's headlines. Gas prices have been falling steadily for about 30 days. There are also signs that shipping costs are coming down. From this article:

In May 2021, a shipping source told me to expect the “transitory” inflation Americans were seeing to get much worse. His cost to ship containers from China to the U.S. had jumped from $2,000 prepandemic to $20,000. So companies selling imported goods—from clothing to food—would soon pass that 10X increase to us. He planned to do his holiday shopping early.

I was therefore thrilled when the same shipping source told me his $20,000-per-container import costs had recently dropped to $8,000. As long as inflation persists, our economy will be unstable. And so with this leading indicator heading back toward normal, it seemed like we might too. Possibly, at least.

The good news is that shipping rates are indeed falling globally, and the supply chain is righting itself. Flexport, a tech-enabled freight forwarder, has seen rates drop from highs of around $20,000 per container to $10,000. And Dave Lissman, a sales manager at importer Port Royal Sales, said he was finally seeing some easing after a long period of pain. “As of recently,” he said, “there has been some slight room for negotiation.”
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Again, many of the experts calling this inflation transitory saw the problem would likely last through the first half of 2022 before supply chains began to normalize. Again, let's remember this thread this time next month and see what the numbers are saying. Beyond the headlines, the numbers are pointing to inflation finally starting to cool off.

 

Good thing, but he's the rarity then. Most people are changing jobs to increase pay (The Great Resignation as it's been termed).

 

That's my husband's employment history for 30+ years. He went where the money was

 

this thread needs to be on speed dial, it is the same with each month, just the dates change

 

works as well as what biden is doing...

 

Thoughts and prayers for your struggles.

 

Inflation is worldwide. Supply shortages caused by the pandemic and different national responses to it. China’s GDP growth is stagnant while the US economy is essentially at full employment. Demand is very strong here. Low unemployment and it is hard to find workers. Folks can blame Biden all they want, but he can’t do much about the cause of the inflation. He can’t stop China from shutting down cities and China will not use a western vaccine that works. Gas prices high because of the War. As examples. One would expect this to like up as a partisan issue because people are that dumb. Perhaps we should tolerate much higher unemployment so wages are lower and we pay less?

 

Consumer Prices follow the commodities. But there is a gap.

 

The democrats don't want solutions from pubs, it would against their Marxist/save the planet ideology. You saw how well our solutions and ideas worked under Trump.

Oh and by the way, all of the inflation numbers are accelerating. Congrats libs.

 

You mean the Trump economy that inherited six straight years of economic growth and falling unemployment from Obama? And for three years, followed the exact same trend lines? All white cutting taxes and increasing spending, resulting in massive deficits? Those Trump ideas?

Trump promised 5% growth after the Obama last six years saw around a 2.5% quarterly rate. Know the average rate we saw under Trump pre pandemic? Around 2.5%. Trump tried to supercharge a mature economy with his tax cuts and spending, and got nothing but deficits for it.

Meanwhile, unemployment is back near the historic lows under Biden. And there's a shortage of labor. Might have to do with the fact Trump cut legal immigration numbers? Had Trump not cut legal immigration, there would be about 2 million more workers in the economy. Not a cure all solution, but it would help with inflation a bit.

You want to return to these policies? They only looked like a success because of what Trump inherited. But upon any reflection, the policies were failures that helped cause the mess we're in.

 

Social Security on track for huge cost-of-living increase but look on the bright side, thanks inept joe

 

Some large companies are giving out large bonuses instead of large raises. That way, if the economy does go south, they don't have to start layoffs so quickly. And if there is any chance of deflation, they don't have to cut salaries, which usually doesn't go over too well.

 

It amazes me how wrong people have gotten cpi when Larry Summers essentially called it. About a 1/3 of cpi is housing, which is somewhat based on rent inflations, but mostly based on owner equivalent rent - which is a survey of what owners think they could rent their house for.


Measuring Price Change in the CPI: Rent and Rental Equivalence : U.S. Bureau of Labor Statistics

As to the first - actual rents - CPI rents lag inflation of new rents. CPI is based on what renters pay now, and if new rents went up this month, but a person entered into a new lease the prior month, that person won’t experience higher rents until that lease ends, say 12 months in the future. So it is logical that you have a lag about six months.

Also on rents, as interest rates go up driving mortgage rates up, even if new home prices level off, the price of home ownership goes up, and becomes more unaffordable, thus causing more people to rent and pushing rent prices up. When house prices stagnate, less people sell, leaving renting as the only option.

The biggest piece is owner equivalent rent, which is kind of squishy. Honestly how many homeowners really know how much their home would rent for? To the extent that number changes, plus or minus, how long until the homeowner realizes it?

Housing prices tend not to go down unless a complete crash as in 2008. This time around supply is much tighter so you likely won’t see a nationwide crash. When home demand cools, people sell less. Demand effects supply in the short and medium term. So prices don’t usually go down. Plus now mortgage rates are going up. I have to believe what people pay for mortgage affects what they would get for rent.

The irony would seem to be that for CPI, in the short and medium term, interest rates may actually cause housing cpi to go up for a while, and setting that aside, changes in housing CPI significantly lag what is happening in the immediate housing market.

Given housing is a big and visible piece of inflation, peoples expectations on wages are probably going to lag too, and the only way that stops is a recession with significant job loss and unemployment.

With narrowing deficits and rising rates inflation will eventually cool, but it could take years, unless we experience a hard recession, which doesn’t seem to be in the cards…yet.