Even the liars at the BLS can’t cover-up the raging inflation in gasoline, natural gas, rent, medical expenses, and food. I thought Janet was waiting for a little inflation before raising rates. I guess she’ll need a new excuse not to raise rates as the CPI is rising at an annualized rate of 4.8% according to the bullshit artists at the BLS. It’s over 10% for people living in the real world.
Submitted by Tyler Durden on 05/17/2016 08:41 -0400
Headline CPI rose 0.4% MoM (above +0.3% exp) for the biggest jump since Feb 2013 but sadly at the same time, price-adjusted hourly wages slid 0.1% in April.
Following a small drop in March, from 8 year highs, Core (ex food and energy) Consumer Prices rose 2.1% YoY (as expected) abesent the effect of Gasoline’s huge 8.1% MoM surge.
Of course this is probably transitory but we note that rent inflation remains at 3.7% YoY – its highest since 2008 and definitively not transitory.
And as the breakdown shows, energy and gasoline price soared in April – so are higher oil prices good or bad again?
The index for all items less food and energy increased 0.2 percent in April after increasing 0.1 percent in March. The shelter index rose 0.3 percent in April following a 0.2 percent rise the prior month. The indexes for rent and for owners’ equivalent rent both increased 0.3 percent, while the index for lodging away from home declined for the second straight month, falling 0.4 percent. The medical care index rose 0.3 percent in April, with the index for prescription drugs rising 0.7 percent and the hospital services index advancing 0.3 percent, but the physicians’ services index declining 0.1 percent. The motor vehicle insurance index rose 1.2 percent in April, and the index for airline fares advanced 1.1 percent after declining in March. The recreation index rose 0.3 percent in April, as did the index for education, and the indexes for alcoholic beverages, tobacco, and personal care all posted slight increases.
Gas prices according to CPI data, are up over 20% in the last 2 months – the biggest spike since June 2009…
In contrast, the index for household furnishings and operations declined 0.4 percent in April, its largest decline since April 2010. The indexes for apparel, for new vehicles, and for used cars and trucks also fell in April, each declining 0.3 percent. The index for communication declined as well, falling 0.2 percent.
Hmmm
The movers and shakers discovered long before the rest of us that the old adage about lies, damn lies and statistics, is a sure fire recipe for separating the rest of us from our hard earned money…….Just ask those blood suckers at the FED. They have been doing it for over a hundred years. If “inflation” has been close to zero as the government claims for so many years, why are we paying 6% in on the debt? If it costing the FED nothing to print and banks are paying zero interest on our savings why should there be any “interest” on the debt at all?
High rental rates are going to become a major problem in a good number of places.
From two directions: Houses and buildings bought at high prices need high rental rates to pay for them, and the people (and businesses) who rent them have diminishing incomes to pay those rates.
Keep an eye on this, IMO it won’t be making news discussions till after the situation reaches near crisis proportions.
As far as rent, I have a few friends that buy houses to rent. There is a big demand for rentals in my area, but the house’s are priced too high, so rent must be high, low return for investors so they go elsewhere.
They buy house’s in semi bad areas for no more than $30k, throw $10-15k at them, then rent them to low income family’s where the state pays the rent straight to them.
One guy owns 35 houses, he employ’s a husband and wife team to cut grass, paint, plumbing etc. Sweet gig.
And according to Yellen, the jump in consumer price inflation is just temporary.
Look at how a college ejumucated economist thinks:
“One theory is that we have too many jobs. That is, economic theory suggests that when the unemployment rate gets very low, workers gain bargaining power and are able to command higher wages because the demand for labor is higher than the supply. Bosses must raise wages to keep good workers, and then they must raise their selling prices in order to pay those wages.
This relationship is known as the Philips Curve, and it’s been the main theory behind the Fed’s monetary policy for more than 50 years: The Fed tries to keep the unemployment rate just above the level that would fuel inflation. That level is known as the nonaccelerating inflation rate of unemployment.”
It works on paper eh?
You used simple math. .4 × 12 = 4.8
No compounding?
Hmmm
Mark raises a good point which I missed completely. Apparently compound rates only apply to consumer debt these days……
Dollar collapse