Article

2022-08-15 Economy

Inflation falls to 9.8% in producer index for July in hint of peak

[Washington Examiner] Inflation as measured by producer wholesale prices slowed to 9.8% for the year ending in July, according to a report Thursday from the Bureau of Labor Statistics.
Always wait for the "correction" in a month or two to the original number.
That year-over-year inflation rate was down from 11.3% the month before and lower than forecasters expected. On a month-to-month basis, the producer price index declined by 0.5%.

The July wholesale numbers mark the first monthly decline since April 2020 at the start of the pandemic, and the annual increase is the lowest since October of last year.

"Cooling prices paid by producers portend a further cooling for consumer prices, as producer prices are further up the inflation pipelines. We expect producer prices to ease as supply chains improve," said Jeffrey Roach, chief economist for LPL Financial. "It could take up to three months for improved supply chains to affect prices for the end consumer."

Posted by Besoeker 2022-08-15 03:16|| || Front Page|| [11133 views ] Top

#1 The Fed is raising rates, reducing its balance sheet, and slowing the growth of M2, the money supply. All these things do have their effects, and I think we're beginning to see them (though I didn't expect to see the effects quite so soon.)

But this is not the time to declare victory and go home. That is what the Fed did in 1975, which only set the stage for the horrific 1979-82 recession. The Fed has to stick by its guns until inflation is dead dead.

Posted by Tom 2022-08-15 06:32|| 2022-08-15 06:32|| Front Page Top

#2 FDIC insured Certificates of Deposit (CD's) are making a comeback. Not in banks of course, but other investment venues. Rates appear to be in the 3-4 percent range, depending on length of deposit.

Posted by Besoeker 2022-08-15 07:14|| 2022-08-15 07:14|| Front Page Top

#3 Alternative explanation, and maybe more likely for those who notice that everything except gasoline kept right on going up in July, while gasoline plunged:

The price of gas, and oil, is determined by supply and demand. Back in the olden days, supply meant Saudi Arabia, Texas, etc., and demand meant Exxon, Shell, Chevron, etc.

However, investors have noticed that they can make a lot of money in commodities, including oil. Seein the price of oil going up, a lot of investors (funds, ETFs, etc.) bought oil that they had no use for but which they (correctly) thought would go higher, then they would sell and make a lot of money. It is possible that they overshot in the first period of this year--too much investment money chasing too little oil--and now, with recession fears rightly looming, fear that they have overshot and are exiting the markets as fast as they can. So the "investors" are raising the supply of oil contracts (if not oil itself) and decreasing the price.

This is an alternate explanation; and in view of every other good and service continuing upwards, more likely. Stay tuned.

Posted by Tom 2022-08-15 10:50|| 2022-08-15 10:50|| Front Page Top

#4 ^ And, if you read articles by the usual suspects at ZeroHedge, you will note a chronic syndrome: When oil prices rise, lots of people who should know better start acting like that is the only direction oil prices will go forever. When prices start to dip, the "up, always up" crowd heads for the hills in a stampede and the bottom falls out of the oil market. Until the cycle repeats, as it always does.

Posted by M. Murcek 2022-08-15 11:10|| 2022-08-15 11:10|| Front Page Top

#5 In the old days such people were called speculators, and it was generally hoped they were smart enough to only gamble what they could afford to lose.

But one reads that in the past two years youngsters with COVID payments burning a hole in their pockets have been playing the markets like they’re video games, as well as using that money to manipulate various markets to reward those they like and punish those they don’t.

Posted by trailing wife 2022-08-15 11:49|| 2022-08-15 11:49|| Front Page Top

#6 We're still getting less and paying more (shrinkflation) in the grocery stores. The NY Empire Mfg. Index shows that manufacturing took a nose dive in July. indicating a slowing of a demand for manufactured products. It could be that people don't have the money to buy these products. Car REPOs have increased. It seems like housing has slowed around here. People seem to have stopped buying houses and some foreclosures have occurred. Gasoline has decreased slightly but something like 44% above for year over year pump prices. Our reserves were sold off and that may have brought gasoline down slightly, Ima not feeling a lot of optimism or rosiness about the economy.

Posted by JohnQC 2022-08-15 12:10|| 2022-08-15 12:10|| Front Page Top

#7 Last month: inflation is most definitely not 10% and to say otherwise makes you a Russian Agent using bad vibes to harm the economy.

Last week: inflation is at 0%.

Today: Yeah, we need last month's inflation to be over 11.5% so that this 9.8% is a high five moment.

Posted by swksvolFF 2022-08-15 14:55|| 2022-08-15 14:55|| Front Page Top

07:43 Procopius2k
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