Mark Hamrick’s Post

“The Consumer Price Index climbed 3.4 percent in April, down from 3.5 percent in March, the Labor Department said Wednesday. The “core” index — which strips out volatile food and fuel prices in order to give a sense of the underlying trend — rose 3.6 percent last month, down from 3.8 percent a month earlier. It was the lowest annual increase in core inflation since early 2021. (…) Food inflation eased in April, providing some relief to grocery shoppers struggling to deal with higher costs. Overall, food prices were flat compared with the prior month, a slowdown from March, when prices rose 0.1 percent. Grocery prices fell 0.2 percent in April after remaining flat for two straight months. The cost of dining out rose 0.3 percent for the second month. (…) Meanwhile, retail sales came in weaker than expected, in a potential sign that high prices are continuing to depress purchases. The flat number came after a strong February and March, however, so it may not add up to real evidence of a downturn.”

U.S. consumer prices dropped for the first time in four years in June, driven by cheaper gasoline and moderating rents, reinforcing the trend of disinflation and bringing the Federal Reserve closer to cutting interest rates in September. The Labor Department's report on Thursday showed a second consecutive month of mild consumer price increases, boosting confidence among Fed officials that inflation is easing after surging in the first quarter. The consumer price index (CPI) dipped by 0.1% in June, the first drop since May 2020, after being unchanged in May. This decrease was largely due to a 3.8% fall in gasoline prices. Shelter costs, including rents, rose moderately by 0.2% after a 0.4% increase in May. Food prices edged up 0.2%, with grocery store prices ticking up 0.1%. In the 12 months through June, the CPI climbed 3.0%, the smallest gain since June 2023, following a 3.3% rise in May. These broad moderations in inflation align with reports from retailers like Target and Walmart, who have cut prices in response to consumer pushback against higher costs. The annual increase in consumer prices has slowed from a peak of 9.1% in June 2022. The CPI report follows last week's news of the unemployment rate rising to a 2-1/2-year high of 4.1% in June. Economic growth has also slowed due to significant rate hikes by the Fed in 2022 and 2023, with second-quarter GDP forecasted near the non-inflationary growth pace of 1.8% annualized. Fed Chair Jerome Powell acknowledged the improving trend in price pressures but stressed the need for "more good data" to solidify the case for rate cuts. He also noted significant softening in the labor market, suggesting a shift in the Fed's focus towards employment. Excluding volatile food and energy components, the core CPI increased by 0.1% in June, the smallest rise since August 2021. The moderation in rents, which rose by 0.3%, contributed to this trend. Healthcare costs and airline fares also provided relief, while prices for used cars and trucks, new motor vehicles, and communication services decreased. In the 12 months through June, the core CPI increased by 3.3%, the smallest year-on-year advance since April 2021. Over the past three months, the core CPI rose at an annualized rate of 2.1%, down from a 3.3% pace in May. The moderation in CPI data is expected to reflect similarly in the Personal Consumption Expenditures (PCE) price indexes, which the Fed tracks for monetary policy. Estimates for June core PCE inflation range from 0.13% to 0.19%, following a 0.1% rise in May. Core inflation is seen increasing by 2.5% year-on-year in June after a 2.6% rise in May. #USConsumerPrices #Inflation #Disinflation #FederalReserve #InterestRates #EconomicGrowth #CPIDrop #GasolinePrices #RentModeration #USEconomy #LaborMarket #MonetaryPolicy #EconomicOutlook #PCEPriceIndexes #ConsumerSpending https://lnkd.in/g6wz3qAG

The “higher than expected” consumer inflation seemed to surprise some. Obviously, every situation is unique and then there are emotions and politics, but let’s just talk data and common sense for a minute. Cost of Producing goods is heavily driven by energy and transportation. Then that flows into the actual cost of goods a consumer pays in store or online. Consumer inflation is the latter. So in the past 2-3 years, energy and transport went up for a cornucopia of reasons (still here). Next, don’t confuse slowing inflation increases with deflation – which has not happened. Further, in most cases, your larger retailers are in contracted rates. They’re not selling hundreds of millions of dollars of goods while purchasing on the spot markets. So CONSUMER inflation comes in slightly later and sticks around. But in light of recent rhetoric and today’s CPI numbers, what’s equally important to note is not just the explicit cost increases, but the increased variability and subsequently lost predictability. Some people point to greedy corporations or various talking points. But your local retailers and stores cannot feasibly swing their selling prices +/- 10%-15% with market changes (which they’re not buying on the spot market anyway). That is only truly witnessed in gas stations and even that fluctuation upsets us as consumers. For consumer prices to truly reduce, costs have to come DOWN, consistently and sustainably. Successful businesses cannot ride waves down and get pinched when prices immediately flip back. Inflation doesn’t come down for weeks, it has to come down for months. But best estimates are made based on what data exists and prices sit in semi static, reasonable range thereafter. Remember, the other thing that infuriates us all, insurance companies and energy companies assess this year’s losses on future rates. If consumer goods did ride waves and lost money, that must be recovered. We’d all be immediately happy. Then we’d be subsequently upset with the illogical price increases later. Why illogical? Your grocery store isn’t going to send you the same letter the electric company does to explain how last years losses were being assessed into the next 18 months Cereal & Butter prices. …just some food for thought in these stressful and tight times.

The prices consumers pay in the marketplace rose at an even slower pace than originally reported, according to closely watched revisions the government released Friday. Revisions to the consumer price index showed that the broad basket of goods and services measured increased 0.2% on the month, less than the originally reported 0.3%, the Labor Department’s Bureau of Labor Statistics said. While the change is only modest, it helped confirm that inflation was moderating as 2023 ended, giving more leeway to the Federal Reserve to start cutting interest rates later this year. The revisions are done as a matter of course for the BLS, but garnered extra attention this year after the market reacted sharply to last year’s changes. Indications that inflation in 2022 rose more than anticipated drove Treasury yields higher and sparked worry from investors that the Fed might keep monetary policy more restrictive. Excluding food and energy, so-called core CPI increased 0.3% for the month, the same as originally reported. Fed policymakers tend to focus more on core measures as they provide a better indication of long-run movements in inflation. Also, the headline November reading was revised higher, up 0.2% versus the initial 0.1% estimate.

The February 2023 Consumer Price Index report reveals that inflationary pressures – while moderating – still exist, with both headline and core measures coming in ahead of forecasts. The monthly headline inflation rate increased to 0.4% from January's 0.3%, while core inflation held firm at 0.4%. On an annual basis, headline inflation rose marginally to 3.2% from 3.1%, and core inflation dipped slightly to 3.8% from 3.9%. A significant contributor to core services inflation is shelter costs, which include rent and owners' equivalent rent (OER). In February, rent inflation accelerate to 0.46% from 0.36%, while OER growth slowed to 0.44% from 0.56%. The combined effect of shelter inflation added 0.16 percentage points to the monthly headline print of 0.4%. Apart from shelter, transportation services also played a notable role in driving core services inflation, with other categories having a minimal impact. The transportation services sector has experienced consistently high inflation rates post-pandemic, with the February figures largely influenced by a substantial rise in airline fares. Additionally, car insurance costs have been a persistent driver in this category over the past three years, and they are anticipated to remain elevated due to high inflation in auto repair and replacement expenses. In recent years, food inflation has been a significant factor in headline inflation, particularly in 2021-2022. However, in 2023, food inflation began moving closer to its pre-pandemic trends. February's food inflation was the lowest since July 2021, with a marked slowdown in the "food away from home" category, representing restaurant prices. This category is more sensitive to labor costs than commodity prices and tends to be less volatile than "food at home" prices. The 12-month pace of "food away from home" prices decelerated to 4.5%, the slowest since mid-2021, indicating a potential easing of labor cost pressures in the service sector. Although "food away from home" is not part of core CPI, it is included in the core PCE, another closely watched inflation gauge in which a reduction would be welcomed by the Federal Reserve. Despite the strong inflation print in February, the Federal Reserve is unlikely to deviate from its plan to keep interest rates steady at the meeting next week. However, the figures may influence the timing of potential rate cuts, with Fed Funds Futures indicating a 14% probability of a cut in May (down from 18% yesterday) and a 66% chance by June (down from 72%). Stay tuned next week for the Summary of Economic Projections, which will inform us of the Fed's outlook for rates, inflation, GDP, etc. In December, the majority of Fed officials projected three rate cuts in 2024, based on the assumption that inflation would continue to move closer to the 2% target. We'll be closely watching how/if that figure changes, given the recent inflation figures. #inflation #cpi #economics #federalreserve #fed #markets #economy #equities

Inflation rose more than expected in January as stubbornly high shelter prices weighed on consumers, the Labor Department reported Tuesday. The consumer price index, a broad-based measure of the prices shoppers face for goods and services across the economy, increased 0.3% for the month, the Bureau of Labor Statistics reported. On a 12-month basis, that came out to 3.1%. Economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%. Excluding volatile food and energy prices, so-called core CPI accelerated 0.4% in January and was up 3.9% from a year ago. The forecast had been for 0.3% and 3.7% respectively. Shelter prices, which comprise about one-third of the CPI weighting, accounted for much of the increase. The index for that category rose 0.6% on the month, contributing more than two-thirds of the headline increase, the BLS said. On a 12-month basis, shelter increased 6%. Food prices moved higher as well, up 0.4% on the month. Energy helped offset some of the increase, down 0.9% due largely to a 3.3% slide in gasoline prices. Stock market futures slid sharply following the release. Futures tied to the Dow Jones Industrial Average were off more than 250 points and Treasury yields surged higher. The release comes as Federal Reserve officials look to set the proper balance for monetary policy in 2024. Though financial markets have been looking for aggressive interest rate cuts, policymakers have been more cautious in their public statements, focusing on the need to let the data be their guide rather than preset expectations. Fed officials expect inflation to recede back to their 2% annual target in large part because they think shelter prices will decelerate through the year. January’s increase could be problematic for a central bank looking to take its foot off the brake for monetary policy at its tightest in more than two decades. Link: https://lnkd.in/eHvZM6A5 My take: As I stated in my Outlook, inflation stickiness will persist and if wage inflation picks up this year, the Fed is in a pickle and will not be able to lower rates as much as market expects. Anyways, knee jerk market reaction was predictable, yields up and risk assets getting clobbered this morning including shares of Arm Holdings and Shopify but we shall see how they end the day….

For the first time in more than 12 months, the pace of consumer price hikes accelerated on an annual basis. Prices rose 0.2% on a monthly basis, driven by shelter costs, which accounted for 90% of the increase, the BLS report said. Despite the uptick in the headline number, the July report showed that underlying inflation continued its cooling streak. Persistently high inflation — specifically grocery, gas, and rent prices — has weighed on Americans for more than two years. Since March of last year, the Federal Reserve has raised interest rates 11 times to the highest level seen in 22 years in hopes of reining in inflation by tempering demand. #increase #inflation #pricing

U.S. consumer prices were unchanged in October amid lower gasoline prices, and underlying inflation showed signs of slowing, supporting views that the Federal Reserve was probably done raising interest rates. The unchanged reading in the consumer price index reported by the Labor Department's Bureau of Labor Statistics (BLS) on Tuesday followed a 0.4% rise in September. In the 12 months through October, the CPI climbed 3.2% after rising 3.7% in September.

Consumer Prices Unchanged in October with Core Inflation Rising at Slowest Pace Since September 2021 https://lnkd.in/eMTkGKpq #news, #follow, #media, #breakingnews, #trending, #viral, #newsupdate, #info, #currentaffairs, #newspaper #CPI, #Inflation , #FED , #interestrates