IT’S CALLED STAGFLATION

Two posts on ZH this morning tell you everything you need to know about Obama’s economy. Real wages are stagnant, just as they have been for the last eight years. In addition, the BLS drones are no longer able to hide the true inflation affecting average households across the nation. Even their “fake numbers” show inflation at 3.6% over the last four months. We know that is bogus, and the true number is in the 5% to 7% range for real Americans paying rent, health insurance premiums, heating their homes, and filling up their gas tanks. 

But the Fed continues to keep rates near 0% so Goldman Sachs can report record earnings and average pay of $338,000 for their “doing God’s work” bankers. When you have no wage growth, while your expenses are rising rapidly, you’ve got STAGFLATION. It’s the worst possible economic situation for deplorables living in the real world outside the bastions of the elite in NYC, DC, LA and SF.

Numerous low, middle and high end retailers have reported atrocious holiday sales and earnings. This contrasts with the bullshit reports from the National Retail Federation and the US government saying holiday sales were solid. Kohls, Macys, Sears, and now Target have admitted their business absolutely sucks. They are closing stores, laying off employees, and slashing their earnings estimates. Does that happen when an economy is booming, as our esteemed president has been crowing about on his farewell tour?

Do you trust your government or do you trust the reality of your bank account and what real businesses operating in the real world are saying?

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Tyler Durden's picture

Despite all the excitement and media hype that wage growth is finally upon us and the green shoots of escape velocity recovery are here, thanks to Obama and Yellen, the facts are different. Real average weekly earnings rose just 0.2% year-over-year in December – the weakest growth since June 2014 (and November’s gains were revised lower).

When Obama took office, real average weekly earnings was growing at around 2.5% YoY. As he leaves office it is growing at just 0.2% YoY.

Does that look like a healthy economic trajectory to hand over to President Trump?

 

US headline inflation rose for a 5th consecutive month, and has not seen a negative print since February, following today’s report that CPI in December rose 0.3%, and up 2.1% from a year ago, the highest since June 2014. Both measures came in line with expectations as energy and gas costs rise and rents and medical costs continued to rise.

Energy costs increased 1.5% from a month earlier, as gasoline rose 3%. Food prices were unchanged for a sixth month, however thiw as more than offset by shelter expenses which climbed 0.3%, reflecting a jump in rental costs.

As shown below, rent inflation rose 4.0% in December, the highest annual increase since December 2007, pushing shelter inflation up 3.6% Y/Y.

The core CPI measure increased 2.2 percent from December 2015, after rising 2.1 percent in the prior 12-month period.  Core inflation has now printed above the Fed’s target rate of 2.0% for 14 consecutive months.

Continued rising prices should further boost inflation and strengthening the case for the Fed to keep raising interest rates this year, although the Fed’s preferred gauge of inflation, the personal consumption expenditures price measure, which puts a lower emphasis on rents, rose only 1.4% in November from a year earlier; it hasn’t matched the central bank’s 2 percent goal since April

“Consumer prices have trekked higher over the past few months on the back of higher energy prices,” Sam Bullard, senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said in a note before the report. The Fed is “well-positioned for multiple rate hikes in 2017” with inflation near target and unemployment below 5 percent, he wrote.

Some more details on core prices:

The index for all items less food and energy increased 0.2 percent in December. The shelter index rose 0.3 percent in December, the same increase as in November, with the indexes for rent and owners’ equivalent rent both repeating their November increases of 0.3 percent. The index for motor vehicle insurance rose 0.8 percent in December following a 1.0 percent rise the prior month. The medical care index, which was unchanged in October and November, rose 0.2 percent in December. The hospital services index rose 0.3 percent, and the index for prescription drugs increased 0.2 percent.

 

The education index also increased in December, rising 0.5 percent. The index for airline fares increased 1.9 percent after declining in November. The index for used cars and trucks rose 0.5 percent, its largest increase since April 2015. The index for new vehicles increased slightly, rising 0.1 percent after falling 0.1 percent in November. Also increasing in December were the indexes for tobacco (0.4 percent), personal care (0.3 percent), household furnishings and operations (0.1 percent), and alcoholic beverages (0.1 percent).

 

The recreation index was unchanged in December. The apparel index, which fell 0.5 percent in November, declined 0.7 percent in December. The communication index also fell in December, decreasing 0.1 percent.

In short, prices continue to rise and will only accelerate should any of Trump’s proposed fiscal measures be implemented.

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Maggie
Maggie

So, Obama was the Affirmative Action Stagflationary President. I just read an article (mentioned by flash in a comment string I think) from 2011 from American Thinker:

“To be sure, no white candidate who had close associations with an outspoken hater of America like Jeremiah Wright and an unrepentant terrorist like Bill Ayers would have lasted a single day. But because Mr. Obama was black, and therefore entitled in the eyes of liberaldom to have hung out with protesters against various American injustices, even if they were a bit extreme, he was given a pass.”

After I read the first few lines of this article, I realized that not only was he given a pass on his credentials, but so were all the political wonks clinging to his skirttails now ensconced in bureaucratic positions where they can continue to create statistics to support fairy tale causes and shove lies into our kids via lying media hacks.

What the BLS has done is hide the complete failure of this presidency.

Read more: http://www.americanthinker.com/2011/08/obama_the_affirmative_action_president.html#ixzz4W7lLX4cK

Doug
Doug

Maggie: I’m not so sure they were successful in hiding the failure of the worst president in American history. Fudged statistics only confirms what we all can see with our own eyes. Incompetence is readily apparent.

Mark
Mark

Theyve done a masterful job hidding the failure.

The pension implosion will hit Trump.

The good news is who gets hit hardest and first. Internationally Europe.

Domestically its Illinois and California.

The migration of people will be very telling.

Maggie
Maggie

Migration is already telling. A lovely authentic Italian restaurant opened in the little 1000ish town closest to us (20 miles). From Sicilian ancestry, they have migrated here from Detroit.

The best chicken gnochi soup I’ve had since visiting Little Italy in Cleveland last trip.

Dutchman
Dutchman

I lived through the Carter stagflation. What a depressing time it was. The government can’t lie: when the birth rate is 0.7 it’s telling you something – people don’t feel secure – they know what’s happening.

Inflation? Don’t forget about the ‘secret’ inflation: 58 ozs of OJ in the previous 64 oz bottle, I’ve seen 18 packs of beer. Same with canned goods.

Long time ago, my idealistic wife sent a letter to Delmonte – she said “you now have 14oz of tomatoes in a can- what about all the recipes that call for 16 oz?” They told her to add 2 oz of water 🙂

Maggie
Maggie

I was just talking to my friends about the hidden cost increases by resizing.

Could someone explain to me how designing a smaller size package saves enough money to justify the entire processing line?

And 4 lb. bags of sugar is just stupid.

IndenturedServant

I went to office depot the other day to buy some envelopes…..the small kind about as wide as a federal reserve note and about 4 inches tall. A box of 100, Office Depot brand was $12.96 out the door. That’s nearly 13 cents each!

I finally broke down and went to buy some new gloves as my winter gloves now show more skin than fabric. Went to Cabelas since I was already in the area. After looking at over a dozen different models/brands, the only ones I found acceptable were $49.00. I left them sitting there on the shelf because Cabelas apparently thinks more highly of those gloves than I do. I went home, ordered a pair of Wiggy’s Kodiak mittens which are guaranteed for life, good to at least -20 below zero and made in ‘murica by ‘muricans! Price? $49.00 with free shipping!

If any of ya’ll heathens ever need some truly amazing winter/cold weather gear. Your first stop should be Wiggy’s! I went down to Boise the middle of December and found my brother soaking his Wiggy’s sleeping bag IN the hot tub. He pulled it out, hung it up outside in the 17 degree cold and went upstairs to put on his long johns. He then got into the sleeping bag, zipped it up and laid down on a ground pad on the outside deck and went to sleep. When he woke in the morning he said he shivered for about 10 minutes then fell sound asleep as temps dropped to single digits. He said he was warm and toasty all night and the sleeping bag was dry by morning as well. Wiggy’s makes some extraordinary gear!

PatrioTEA
PatrioTEA

All the government numbers have been cooked & manipulated for that last decade. The new administration should re-calculate and re-calibrate them all from the start and have totally new, valid baselines.

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