Latest Inflation Numbers and Discussion

Fed Chairman Powell comments today, from WSJ and Barrons
Last year, rebounding supply supported U.S. growth in spending and also employment, alongside a considerable decline in inflation,” Powell said at the Wilson Center think tank in Washington, D.C., on Tuesday afternoon. “The more recent data show solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal.”
./.
The recent data have clearly not given us greater confidence” that inflation is making progress to the Fed’s goal “and instead indicate that it is likely to take longer than expected to achieve that confidence,”
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The recent data have clearly not given us greater confidence” that inflation is making progress to the Fed’s goal “and instead indicate that it is likely to take longer than expected to achieve that confidence,”
Click to expand...

My Gloat-O-Meter has once again been pegged on the far right. :D

I'm glad the Fed Chairmen is coming around to what I have been saying for at least a year.
 
So the first print on GDP for the first quarter came out low this morning.

But the PCE for the first quarter came out hotter, 3.7% instead of the expected 3.4%.

Mixed signals for the Fed if economy is finally slowing down? Jobs report for April should be next week.
 
Th Employment Cost Index was released this morning (here). It is the Fed’s preferred index for looking at wage growth.

Compensation costs for civilian workers increased 1.2 percent, seasonally adjusted, for the 3-month period
ending in March 2024, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 1.1
percent and benefit costs increased 1.1 percent from December 2023. (See tables A, 1, 2, and 3.)

Compensation costs for civilian workers increased 4.2 percent for the 12-month period ending in March 2024
and increased 4.8 percent in March 2023. Wages and salaries increased 4.4 percent for the 12-month period
ending in March 2024 and increased 5.0 percent for the 12-month period ending in March 2023. Benefit costs
increased 3.7 percent over the year and increased 4.5 percent for the 12-month period ending in March 2023.
(See tables A, 4, 8, and 12.)
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The number is higher than expected and points to an ongoing inflation rate between 3.0%-3.5%.
 
I guess Powell saying he doesn't see a reason to tighten soothed the market today.

I think also this week EU had a good number on inflation.
 
We've noticed an uptick in prices just very recently, like in the past month or so. Before that, outside of gasoline, we hadn't seen it.

My brother and I go to breakfast at the same place twice a week. We almost always get the same thing and it typically runs about $33 to $36. Over the past month the same order is now running $41 to $44. A few of our favorite restaurants also suddenly seem to be up in price by ~$10 to $15 for dinner.

DW'S nail salon just announced that they are now closing Sundays. "A lot of people seem to be not coming as often", according to the owner. So, not having your nails done regularly is something that could be a leading indicator of a slowing economy...certainly an expensive luxury.
 
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marko said:
We've noticed an uptick in prices just very recently, like in the past month or so. Before that, outside of gasoline, we hadn't seen it.
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Wow. Maybe you just weren't looking at all the last few years. There's another thread where people post their examples of inflation:

Examples of current inflation - add yours!

Yikes! I do all the shopping as DW is handicapped and can't get around without a lot of equipment and time. Today I made the mini pharmacy and grocery run and it seems like every time I go shopping, the prices are going up. I'm talking about basic stuff and not Kobi steaks or other...
www.early-retirement.org www.early-retirement.org
 
I went to Wichita Kansas for 4 days where the COL is much cheaper. We went to an Italian chain restaurant for dinner and there were 5 of us. Nobody drinks so no alcohol and the bill was still 160 with the tip. I was surprised since most things are much cheaper there.
 
Teacher Terry said:
I went to Wichita Kansas for 4 days where the COL is much cheaper. We went to an Italian chain restaurant for dinner and there were 5 of us. Nobody drinks so no alcohol and the bill was still 160 with the tip. I was surprised since most things are much cheaper there.
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Cutting the alcohol definitely can make a big difference, but I even cut the soda anymore, which can be $3 or more each, before tax/tip.
 
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GenXguy said:
Wow. Maybe you just weren't looking at all the last few years. There's another thread where people post their examples of inflation:

Examples of current inflation - add yours!

Yikes! I do all the shopping as DW is handicapped and can't get around without a lot of equipment and time. Today I made the mini pharmacy and grocery run and it seems like every time I go shopping, the prices are going up. I'm talking about basic stuff and not Kobi steaks or other...
www.early-retirement.org www.early-retirement.org
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Oops. That's where I thought I was posting. :facepalm:
Gotta stop morning drinking.
 
We haven't changed our spending much due to inflation. I've noticed it most on dining out.

I think that the higher interest rates will tamp down demand for housing. DD was thinking of trading up but is inclined to stay where she is because f they traded up their mortgage interest rate would be so much higher and as a result their monthly housing cost would be much higher.

I read an interesting article the other day that proposed to allow borrowers to keep their existing mortgage but substitute collateral... one home for another home. Interesting idea I thought.
 
pb4uski said:
We haven't changed our spending much due to inflation. I've noticed it most on dining out.

I think that the higher interest rates will tamp down demand for housing. DD was thinking of trading up but is inclined to stay where she is because f they traded up their mortgage interest rate would be so much higher and as a result their monthly housing cost would be much higher.

I read an interesting article the other day that proposed to allow borrowers to keep their existing mortgage but substitute collateral... one home for another home. Interesting idea I thought.
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I'm wondering why a lender would do that. At worst, they keep the same loan paying them the same low rate of return. But there's a chance they can ditch the lower yielding loan and extend a new mortgage loan at today's higher rates. If I were the bank, I wouldn't do it.
 
National TV news story actually covered the high cost of housing yesterday - not just for home prices, but all the related costs that have really shot up.

Home prices, mortage costs, rent, property taxes, homeowner's insurance, repairs, home improvement, HOA fees, and utilities to name a few.
 
pb4uski said:
I read an interesting article the other day that proposed to allow borrowers to keep their existing mortgage but substitute collateral... one home for another home. Interesting idea I thought.
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Some creativity will be needed to solve the problem of people with mortgages in the 2% to 3% area not being willing to sell and give up such a good deal on their mortgage rate.

:oops:
 
I was able to roll my Cal Vet mortgage from first home to a second. Escrows had to close simultaneously and I needed a second for the higher cost of the 2nd home, but my agent took care of those logistics and earned their commission.
 
pb4uski said:
We haven't changed our spending much due to inflation. I've noticed it most on dining out.
Click to expand...
I actually experienced disinflation at a restaurant last night. 5 of us went to a brewpub. The three overwhelmed wait staff were practically running to serve a full house. After 15 minutes of being ignored, we left, costing us $0.
 
pb4uski said:
We haven't changed our spending much due to inflation. I've noticed it most on dining out.
Click to expand...
Same with us. Restaurants in our town are up about 30% YOY and that doesn't include the new 3-5% fees listed on the bills (back of house, living wage, etc.).
 
We seem to be stuck in the 3% area. For now my TIPS with a fixed rate of about 2% are looking good. Sadly, my COLA-lite pension is falling further behind. Win some. Lose some.
 
Chuckanut said:
Some creativity will be needed to solve the problem of people with mortgages in the 2% to 3% area not being willing to sell and give up such a good deal on their mortgage rate.

:oops:
Click to expand...

Not really different from people with paid off homes not wanting to upgrade to bigger/better more expensive house.

Back when mortgages were 2% it was cheap to upgrade, now at ~6% not so cheap.
 
Chuckanut said:
We seem to be stuck in the 3% area. For now my TIPS with a fixed rate of about 2% are looking good. Sadly, my COLA-lite pension is falling further behind. Win some. Lose some.
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Yeah, that doesn't cut it when my 3 largest bills are up an average of 20% this year. That's about a third of my budget, and that's excluding the lumpy home maintenance/repairs that will be even more costly and up a huge amount in recent years.
 
OTOH, markets are way up today, after the CPI report came out.

If you have equity investments, your net worth should be at or near all time highs.

Wealth effect might lead to more BTD spending, which would support or increase inflation.

Other day on CNBC someone noted that profits and profit margins at big cap companies are also near or at record highs.

So higher inflation and higher corporate profits.

Correlation or causation?
 
If the Federal gubmint is going to spend, spend and spend thus driving up the deficits and inflation, then we as little guys and gals should best hold some ownership in businesses that can adjust to higher costs and still be profitable.

Getting a job that "pays more" is no longer a realistic option for many of us.
 
Haircut today!

My barber said it's time to go all in with stocks and his floor sweep helper agreed! (these guys are "in the know" from what I hear!)

Then my barber said he has raised the price of today's haircut to $30 from $25 and will charge 3% more if I use a credit card.

How much of a tip should I leave is the question?:unsure:
 
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