Dow bounces 800 points Friday on encouraging inflation data after rough week: Live updates
Key Fed inflation measure shows 2.4% rate in November, lower than expected
These people are incorrigible liars.
Headline pce inflation ticked up from 2.30% year over year in October to 2.44% in November.
Core pce inflation ticked up from 2.79% year over year in October to 2.81% in November.
"We expected worse! Buy stonks!"
And so they did.
The S&P 500 Equal Weight Index is down almost 7% this month, to date.
Meanwhile, more inflation for the rest of us, which Powell has never really tried to stop. You know, like Christianity hasn't failed, it just hasn't really been tried.
The Wall Street Journal reports here, also saying low income wage growth now lags everyone else's:
Howard Jackson, president of retail-focused firm HSA Consulting, estimates that inflation has actually averaged about 6.3% over the past 12 months for low-income households. Jackson said this estimate adjusts the consumer-price-index basket to weigh necessities—such as rent, utilities and food—higher than things they tend to spend less on, such as cars, furniture, clothes and consumer electronics. His estimate considers what items constitute the food basket, based on surveys of low-income consumers. “If you don’t have much money, you keep your pair of jeans a lot longer. Those are the purchases that get deferred,” Jackson said.
3.2%, 3.4% . . . and 3.5% year over year now in November 2024.
Overall prices are up 3% yoy in November.
Wholesale prices rose 0.4% in November, more than expected:
Final-demand goods prices leaped 0.7% on the month, the biggest move since February of this year. Some 80% of the move came from a 3.1% surge in food prices, according to the BLS.
Within the food category, chicken eggs soared 54.6%, joining an across-the-board acceleration in items such as dry vegetables, fresh fruits and poultry. Egg prices at the retail level swelled 8.2% on the month and were up 37.5% from a year ago, the BLS said in a separate report Wednesday on consumer prices.
The Fed is expected still to cut again at the next meeting despite all the evidence pointing to persistently high and increasing inflation, hiding behind the skirts of fear of job losses, a smokescreen for gifting easier money to speculators, and to federal authorities who now need to finance $36.1 trillion in the national debt at lower rates.
20Y and 30Y bonds are revolting, demanding 4.624 and 4.551 as we speak, now the highest yields across the curve, as the short end yields in US Treasury bills come back down to earth.
Yeah, and the preferred gauge is core dammit, 2.8%, not the headline 2.3%.
Fed’s preferred inflation gauge rises to 2.3% annually, meeting expectations
We have been range-bound since April, averaging 2.7% year over year for six months.
The Fed is making ZERO progress, and yet . . .
... traders increased their bets that the Fed would approve another rate cut in December.
In 2023 earning $100k made you top 15% of wage earners, but in 2018 it made you top 10%.
$125k is the new top 10%.
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| 2018 |
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| 2023 |
CNBC: Wholesale prices rose 0.2% in October, in line with expectations
Wholesale prices nudged higher in October, though largely in line with expectations and mostly consistent with the Federal Reserve cutting interest rates again in December, the Bureau of Labor Statistics reported Thursday.
The producer price index, which measures what producers get for their products, increased a seasonally adjusted 0.2% for the month, up one-tenth of a percentage point from September though matching the Dow Jones consensus forecast. On a 12-month basis, headline wholesale inflation was at 2.4%.
Excluding food and energy, core PPI rose 0.3%, also one-tenth more than September and also matching expectations. The 12-month rate was at 3.1%.
"Largely in line" and "mostly consistent" lol. Both 12-month measures were higher than the consensus expected, which was 2.3% for headline and 3% for core. The year over year measures are the most important anyway, especially core.
Why lie about it?
CNN: Wholesale inflation heated up again last month, reversing recent progress
US wholesale inflation picked up more than expected in October, indicating that some price pressures persist at the producer level.
The Producer Price Index, a measurement of average price changes seen by producers and manufacturers, rose 0.2% on a monthly basis and 2.4% for the 12 months ended in October, marking an acceleration from September, when prices ticked up 0.1% for the month and grew 1.9% annually, according to Bureau of Labor Statistics data released Thursday. ...
FactSet consensus forecasts called for a 0.2% monthly gain and for the annual rate to heat up to 2.3%.
Excluding food and energy prices, which tend to be volatile, core PPI rose 0.3% on a monthly basis, marking an acceleration from 0.2% in September. Annually, core PPI heated up from 2.9% to 3.1%, the largest increase since June. Economists projected a 0.2% monthly gain and a 3% annual rate.
Obviously not all prediction models were the same. FactSet projected a 0.2% monthly gain for core vs. 0.3% for core shown above by FXStreet.
But again, the year over year is up MORE THAN EXPECTED for BOTH measures in most models. CNN mentions it, CNBC does not.
You can clearly observe that overall, headline wholesale prices year over year have been trending higher since June 2023. That bottom came out in July 2023, when the Fed last hiked the interest rate in the current cycle and then paused for good.
That was a big mistake.
The rise in wholesale prices since then is as good an indicator as any that higher inflation is deeply embedded in the economy and that the Fed stopped hiking too soon. Arguably core prices sent the same signal, but not starting until after December 2023.
Paying attention to core could explain the Fed's mistake, but for the fact that if the Fed were truly listening to this information, it wouldn't have then cut by 50 basis points in September 2024. I mean, c'mon man.
Jay Powell represents the interests of the bankers and Wall Street, for whom inflation is a good thing because it is the screen behind which the pipeline from prices to profits gets juiced.
He does not represent the people.
Who appointed that guy anyway?!
Seasonally adjusted core cpi inflation is trending higher since July, and ticked up from 3.25% year over year in September to 3.30% in October.
Not seasonally adjusted inflation is up to 3.33% in October from 3.31% in September, also trending higher since July.
And yet Jerome Powell keeps cutting the Fed Funds Rate, 50 basis points in September and another 25 basis points last week. 10Y yield minus 2Y has been showing its displeasure ever since, reversing its healthy trend. So has the 30Y mortgage.
Congress continues to spend like drunken sailors, and Powell has joined them with loose monetary policy now after not tight enough policy EVER.
The whole thing is DISGUSTING. And the election changes NOTHING.
"That thing just won't come down!"
Reported here in "Inflation-shocked low- and middle-income Americans may not spend normally for years":
“For a very large share of Americans, the bottom 60% are spending more on essentials than before the pandemic,” said Michael Pearce, Oxford Economics deputy chief U.S. economist. “The burden is hardest among the lowest income but also touches middle income. Spending patterns of low-income Americans will take years to recover.” ...
The last time low-income Americans’ discretionary spending fell this much, which was during the Global Financial Crisis of 2007-2008, it took five to 10 years for spending patterns to return to previous levels, he said.
“And the reason was gas prices fell,” Pearce said. Global oil prices fell by about 70% between 2014-16, which pushed pump prices sharply lower and helped low-income Americans catch up.
“It’s harder to see some revolutionary cost saving (like that) on the horizon,” he said.
Harder to see only if we continue with the green energy nonsense.
The opportunities are YUGE for Trump/Vance because ALL energy costs much more now.
It's not just gasoline. Get the government boot off the neck of fossil fuel producers and gasoline will come down, natural gas will come down, and electricity will come down.
Base energy from coal should be transitioned to nuclear, which works in cold weather and hot weather without fail just like coal, unlike natural gas, wind, and solar, which are fine where appropriate but not as base energy, the energy you must have when you need it when the sun doesn't shine, the wind doesn't blow, and the gas won't flow.
J. D. Vance knows:
WASHINGTON, D.C. -- The economy ranks as the most important of 22 issues that U.S. registered voters say will influence their choice for president. It is the only issue on which a majority of voters, 52%, say the candidates’ positions on it are an “extremely important” influence on their vote. Another 38% of voters rate the economy as “very important,” which means the issue could be a significant factor to nine in 10 voters. ...
The current 52% of voters rating the economy as an “extremely important” influence on their vote for president is the highest since October 2008 during the Great Recession, when 55% of voters said the same.
More.
It's not 2008, obviously, where everyone feared a catastrophe with banks failing left and right, homes going into foreclosure, and stocks tanking, but the perception of the economy as lousy today because of high inflation is remarkably high as it was in 2008 as indicated by this poll.
Everyone forgets that the vast majority of the job losses came after Obama was elected in 2008, not before, which took a record number of years to recover, setting the stage for Donald Trump. And pandemic fear drove the election cycle in 2020 and not the economy because of the gargantuan bailouts of the people.
Kicker:
Voters view Donald Trump as better able than Kamala Harris to handle the economy, 54% versus 45%.
Core pce inflation averaged 1.6% year over year under Donald Trump.
CNBC knows full well that core pce inflation is the key gauge watched by the Fed, but it headlines the happy talk, lower, non-core number:
Fed officials tend to focus more on core as a better measure of long-run trends.
