A deep dive on shelter costs in the CPI based on an article from the US Bureau of Labor Statistics. Things are not as they might appear – another case of numberwanging…
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Tag: cpi
The Persistence Of Inflation…
As discussed yesterday, the US inflation read was seen by the markets as important. A fall in the number would lead to markets potentially regaining their footing. Before the report, economists had been betting that annual inflation would dip below 7% in the third quarter of this year on expectations that supply chains will get back in order and inflation will dent demand.
And of course Joe Biden had come out before the number was released saying “I want every American to know that I am taking inflation very seriously and it’s my top domestic priority,” “The first cause of inflation is a once-in-a-century pandemic. Not only did it shut down our global economy, it threw supply chains and demand completely out of whack… And this year we have a second cause: Mr. Putin’s war in Ukraine.”
But Americans got little respite from inflation in April, as prices for a range of necessities and discretionary-spending categories continued to climb at some of the fastest-ever rates. The Labor Department said Wednesday its consumer price index slowed to 0.3% last month from 1.2% previously, exceeding forecasts for a slowdown to a 0.2% rise. Consumer prices in April year-on-year slowed to 8.3% from 8.5%.
Grocery prices were up 10.8% over April 2021, with meat rising 13.9% and eggs up 22.6%.
That S&P bear market debate is raging nonetheless, with some strategists and observers saying the S&P 500 is growling just like one should. Wall Street banks like Morgan Stanley have been saying the market is getting close to that point.
But should the S&P 500 officially enter the bear’s lair, Bank of America strategists, led by Michael Hartnett, have calculated just how long the pain could last. Looking at a history of 19 bear markets over the past 140 years, they found the average price decline was 37.3% and the average duration about 289 days.
While “past performance is no guide to future performance,” Hartnett and the team say the current bear market would end Oct. 19 of this year, with the S&P 500 at 3,000 and the NASDAQ Composite at 10,000.
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Inflation Is Hot, Hot, Hot!
The latest data from the ABS reveals that The Consumer Price Index (CPI) rose 2.1 per cent in the March 2022 quarter and 5.1 per cent annually, according to the latest data from the Australian Bureau of Statistics (ABS).
More importantly, non discretionary costs were up 6.6% – things you have to buy. So this underscores the issues households are facing. Expect more pressures ahead, and upcoming RBA rate hikes.
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Peak Inflation: Really?
Today we got the latest read on inflation in the US. The consumer price index, or CPI, climbed to 8.5% in the 12 months through March, above economists’ forecasts of 8.4%, Some are suggesting we are reaching a peak, but that is more hope than data driven in my view. In fact, it was the core CPI, which excludes food and energy, that dominated investor attention.
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Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
The Inflation Problem…
Stocks finished with sharp losses in the US on Thursday, dropping after the January consumer-price index showed a much hotter-than-expected 7.5% year over year jump. And Equities took another leg lower in afternoon trade after St. Louis Federal Reserve Bank President James Bullard told Bloomberg that he would like to see the central bank deliver 100 basis points, or 1 percentage point, worth of rate increases over its next three meetings.
The Dow Jones Industrial Average dropped 1.47%, to close near 35,242, while the S&P 500 fell 1.81%, to close near 4,504. The NASDAQ Composite tumble 2.1%, ending near 14,186.
The Treasury Yield shot higher, with the 10 year up 5.67% to 2.036 – cross the 2% level for the first time since 2019. The two year was up 18.62% to 1.599. The markets thinks rates are going higher faster.
US inflation hit a 40-year-high in January after food, electricity, and shelter drove a bigger than expected rise in the consumer price index and pushed financial markets to price in a higher chance the Federal Reserve will hike rates by 0.50 percentage points in just over a fortnight.
Excluding the volatile food and energy components, so-called core prices increased 6% from a year ago, the most since 1982, and 0.6% from a month earlier.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
CPI Numberwang Jumps Higher But Still Does Not Tell The Truth!
The latest CPI for Australia to December was much stronger than expected and puts more pressure on the RBA to react sooner. But as we examine the data we also update our shadow estimate of the TRUE rate of inflation which is much higher, and helps to explain the high levels of financial stress in the system.
The Incredible CPI Numberwang
The ABS has annually re-weighted the Consumer Price Index (CPI) and Selected Living Cost Indexes (SLCIs) since 2018, predominantly using Household Final Consumption Expenditure (HFCE) data. Annually re-weighting the CPI ensures that the CPI basket continues to be representative of spending by Australian households.
Last week they published the proposed changes to the index, The 2021 re-weight will apply from the December 2021 quarter. The CPI will be released on 25 January 2022 and the SLCIs will be released on 2 February 2022.
No surprise then that CPI is on average understated. The question is by how much. It is a complex task to try to recompute the true CPI, and it depends on both methodology and baseline assumptions. However my quick back of the envelope estimate is the true CPI in Australia is running closer to 7%. Which means the RBA have taken interest rates way to low, an inflated housing to the max. This is another pure case of Numberwanging…
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
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The CPI Is Higher!
The ABS released the latest CPI to Sept 2021.
The Consumer Price Index (CPI) rose 0.8% this quarter.
Over the twelve months to the September 2021 quarter, the CPI rose 3.0%.
The most significant price rise were for New dwelling purchase by owner-occupiers (+3.3%) and Automotive fuel (+7.1%).
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Price Booms And Then What? Property Signs 28th July 2021
The latest edition of our finance and property news digest with a distinctively Australian flavour.
In today’s show we look at the latest CPI data for the June 21 quarter, reflect on NSW’s booming stamp duty take, visit Westpac’s thoughts on future property price movements, and also look at soaring construction costs, and a recent report which says that Australia’s heavy reliance on export of fossil fuels made the nation’s economy extremely vulnerable to changes in other markets’ emissions policies under the current settings.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
So Where Did Inflation Go?
We look at the latest CPI from the Bureau of Statistics. The inflation dragon is sleeping…
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