OT: July CPI

[FreeDawg]

Lower than expected. Markets responding accordingly. Does the Fed reverse course? I think so

https://www.bloomberg.com/news/arti...elerates-more-than-forecast-on-gas-price-drop

The data may give the Fed some breathing room, and the cooling in gas prices, as well as used cars, offers respite to consumers. But annual inflation remains high at more than 8% and food costs continue to rise, providing little relief for President Joe Biden and the Democrats ahead of midterm elections.

Link to thread discussing to lead up to this report https://forums.sixpackspeak.com/showthread.php?240116-OT-July-CPI-next-week

 

[Cooterpoot]

They will not. Fuel is fueling that primarily. If you look at goods, they're still up. Spending is falling off because people just can't afford non-essentials much. The fed isn't going to back off now.

 

[johnson86-1]

They will not. Fuel is fueling that primarily. If you look at goods, they're still up. Spending is falling off because people just can't afford non-essentials much. The fed isn't going to back off now.

In addition to that, we're still 6.5% over their announced target and there is supposedly more housing inflation that is not incorporated into the data yet. This may give them the flexibility to do a half percent hike, but if unemployment doesn't rise, they pretty much have to keep hiking.

 

[BoomBoom.sixpack]

Lower than expected. Markets responding accordingly. Does the Fed reverse course? I think so

https://www.bloomberg.com/news/arti...elerates-more-than-forecast-on-gas-price-drop




Link to thread discussing to lead up to this report https://forums.sixpackspeak.com/showthread.php?240116-OT-July-CPI-next-week

Overall, no inflation for the month. Zero. (Energy decreases offsetting everything else.) Food up at over 12% annual basis. RE up at 6% annual basis. Core up at 3.6% over the month at an annual basis.

So, is food and core (which is likely a lagging indicator of energy prices) at a level that necessitates putting us into recession? I don't think so.

It probably gets the Fed to reduce its planned increase by a basis point or 2. They will still increase it some though.

 

[FreeDawg]

That would be the Fed reversing course. The talk leading up every time has been it’s either gonna be ___ or higher.

 

[FreeDawg]

Do you believe the Fed hike is going to be the same or more? Or less?

 

[Cooterpoot]

I believe the fed hike will be .75 again. I'm looking at housing numbers from the 5th and it's ugly.
Volume is 27% below 2019 level (same time). HPA for July, August, and first half of Sept. is projected at 12.5%, 10.2%, & 9.6%, which is down from June's estimated 15%.
It's a strong trend reversal from the last two years. They're going to try to get YOY HPA to 4-6% by end of year. Throw in very low unemployment and that's why the FED will continue their current path IMO.

 

[dorndawg]

I believe the fed hike will be .75 again. I'm looking at housing numbers from the 5th and it's ugly.
Volume is 27% below 2019 level (same time). HPA for July, August, and first half of Sept. is projected at 12.5%, 10.2%, & 9.6%, which is down from June's estimated 15%.
It's a strong trend reversal from the last two years. They're going to try to get YOY HPA to 4-6% by end of year. That's why the FED will continue their current path IMO.

I think 75 is a possibility, but only bc they aren't meeting in August. As we sit here today, 50 is my number for the Sept meeting

 

[Cooterpoot]

I think 75 is a possibility, but only bc they aren't meeting in August. As we sit here today, 50 is my number for the Sept meeting

I can agree with that if we see significant reversals in unemployment and HPA. Let's face it, a lot of prices on goods aren't going to come down unless there's a massive decline in demand. We haven't hit that yet.

 

[dorndawg]

I can agree with that if we see significant reversals in unemployment and HPA. Let's face it, a lot of prices on goods aren't going to come down unless there's a massive decline in demand. We haven't hit that yet.

You're not wrong.

 

[BoomBoom.sixpack]

I can agree with that if we see significant reversals in unemployment and HPA. Let's face it, a lot of prices on goods aren't going to come down unless there's a massive decline in demand. We haven't hit that yet.

The goal isn't for prices to come down, it's for them to stop going up (more than 2%/yr). And we don't need a massive drop in demand for that.

 

[Drebin]

Overall, no inflation for the month. Zero. (Energy decreases offsetting everything else.) Food up at over 12% annual basis. RE up at 6% annual basis. Core up at 3.6% over the month at an annual basis.

So, is food and core (which is likely a lagging indicator of energy prices) at a level that necessitates putting us into recession? I don't think so.

It probably gets the Fed to reduce its planned increase by a basis point or 2. They will still increase it some though.

8.5% equals zero?

Helluva take. I'm sure that will come as a huge relief to the millions of folks who are are still struggling to buy groceries.

Gasoline is still up 44%.
Groceries are still up 15%
Electricity is still up 15%

Vehicle and housing are still up significantly.

Step one in solving a problem is recognizing that there's a problem, not gaslighting folks into thinking there isn't one.

 

[horshack.sixpack]

Is there any breakout on housing by area? I have some interest in housing in Nashville and wonder if it is impacted at all/less/same?

 

[BoomBoom.sixpack]

8.5% equals zero?

Helluva take. I'm sure that will come as a huge relief to the millions of folks who are are still struggling to buy groceries.

Gasoline is still up 44%.
Groceries are still up 15%
Electricity is still up 15%

Vehicle and housing are still up significantly.

Step one in solving a problem is recognizing that there's a problem, not gaslighting folks into thinking there isn't one.

Prices have risen 8.5% over the last year. Prices have not risen over July 2022. That's not a take, that's facts. The take is that leading indicators are falling, lagging indicators are still up (unsurprisingly).

Prices are starting to stabilize. That's a good thing, and not something worth stalling the economy over. Sorry if that conflicts with your narrative and political goals.

 

[Cooterpoot]

The goal isn't for prices to come down, it's for them to stop going up (more than 2%/yr). And we don't need a massive drop in demand for that.

You're completely missing the point. If everything stays at 8%-15% above the "normal" pricing, then people are in trouble.

 

[Go Budaw]

8.5% equals zero?

Helluva take. I'm sure that will come as a huge relief to the millions of folks who are are still struggling to buy groceries.

Gasoline is still up 44%.
Groceries are still up 15%
Electricity is still up 15%

Vehicle and housing are still up significantly.

Step one in solving a problem is recognizing that there's a problem, not gaslighting folks into thinking there isn't one.

I think he was saying that the month over month inflation was flat, since CPI is a year over year metric. 8.5% is obviously not zero. Nobody is really disputing that.

 

[BoomBoom.sixpack]

You're completely missing the point. If everything stays at 8%-15% above the "normal" pricing, then people are in trouble.

Thats not the point. I don't disagree as to the impact of these higher food prices, but the Fed will NOT be seeking to reverse these prices. Merely to stabilize them, on average. In practice, that will mean most of the goods that have jumped in price the most will mostly come back down. But they won't be looking at or for that.

 

[Cooterpoot]

Thats not the point. I don't disagree as to the impact of these higher food prices, but the Fed will NOT be seeking to reverse these prices. Merely to stabilize them, on average. In practice, that will mean most of the goods that have jumped in price the most will mostly come back down. But they won't be looking at or for that.

Demand controls pricing. WTH you think the Fed is trying to control? I'll help you out- It's demand. Recessionary pressures cut demand.