Your Place in Cyber Space for Inflation Data
The U.S. Bureau of Labor Statistics (BLS) released its September Inflation report on October 10th, 2019, for the 12 months through the end of September 2019. Annual Inflation is Down Very Slightly Annual inflation in September was 1.71% virtually unchanged from August's 1.75%. Inflation has been in a narrow range throughout 2019. 1.79% in May, 1.81% in July, 1.65% in June, peaking at 2.00% in April. Inflation peaked at 2.95% in July 2018. The CPI-U index in September was … [Read More...]
Inflation can either benefit or destroy American businesses, and individual preparation for its inevitable impact often decides how detrimental it is.
The Producer Price Index (PPI) is similar to the Consumer Price Index (CPI) in that both track the cost of goods and services via an index that also provides the percentage increase on a monthly and annual basis. But they are different in the types of goods and services that they track. The CPI tracks prices that are relevant to Consumers such as housing, transportation, food, and clothing.
The PPI on the other hand tracks prices that are relevant to businesses such as commodities like grains, steel, lumber, and oil. It also includes, “processing stages” (i.e. unfinished goods in the process of being created) and finished goods. Finished goods are on the wholesale market and on their way to retailers. Once they arrive at the retailer they become subject to counting in the CPI.
The U.S. Bureau of Labor Statistics (BLS) released their August Inflation report on September 12th 2019, for the 12 months through August 2019.
While securing customers and generating sales can increase a company’s profit margin, it is a country’s economy that can determine the growth and survival of an entire industry.
Currency depreciation happens when a nation’s currency (e.g. the Chinese Yuan) decreases in value in comparison to another country’s currency (e.g. the U.S. Dollar).
So, if the dollar increases in value compared to the Yuan, it means U.S. based businesses or individuals could receive more for their money from an overseas supplier than they did previously, even if the price in the foreign currency is unchanged. On the other hand, Chinese companies will pay more for their imports and receive less for their exports.
It is, for this reason, that currency appreciation/depreciation can severely impact companies that primarily export or import goods.
Inflation can affect the cost of insurance through a variety of different factors. For instance, individuals or families with homeowner’s insurance may be subject to higher premiums during periods of higher inflation due to rising costs of labor and materials. However, inflation is only one of many factors which contribute to fluctuation in insurance costs. But in addition to the cost of insurance, policyholders need to keep an eye on the value of the coverage as well, since over-time coverage can become inadequate due to the effects of inflation.
Annual inflation for the 12 months ending in July was 1.81% which is below the FED target of 2.00%. At the end of July, FED Chairman Jerome Powell announced the expected lowering of interest rates but he threw a bit of a zinger in by not promising more cuts to come. The market got a bit jittery and then Trump announced more sanctions on China which threw the market into a tailspin. But on August 12th Trump backed off and the markets rebounded on the 13th but lost all the gains on the 14ths opening.
Back in 1918 gasoline was $0.25 a gallon and by 1932 prices had fallen to 18 cents a gallon! But as we all know over the last 100 years the purchasing power of the dollar has fallen drastically so in order to get the true picture we can’t just say that the lowest price of gas was 18 cents per gallon, we need to adjust the price for inflation.
Electricity Price Inflation Residential electricity prices in the U.S. have risen from an average of 7.83 cents per kilowatthour in 1990 to an average of 11.44 cents per kwh in 2010. This is a 46% increase in 20 years and sounds like a lot but as you can see from the chart below for many years[Read More…]
Source: inflationdata.com | NYSE Index Inflation Commentary To Print this Chart: When Printer dialog box appears be sure to switch to Landscape mode Note: Please feel free to link to this page but not to the image itself as the image may be renamed (or deleted) when it is updated but the page URL will[Read More…]
Your Ability to Choose Should Increase Competition In years past consumers didn’t have a lot of choice when it came to their natural gas supplier, they were tied to the local gas utility, so if they wanted to charge a 541% markup you were pretty much stuck. But just prior to the new millennium states began[Read More…]
Inflation Adjusted Real Estate Prices- Lets take a look at the idea that housing prices always go up. Of course, each neighborhood is different, so some neighborhoods might be going down while a few miles away housing prices are skyrocketing but by looking at the nationwide average we can get a better picture of the overall trend. The St. Louis Federal Reserve publishes the following chart that shows the S&P/Case Shiller National Home Price Index and by adjusting those prices for inflation we can get a better picture of how real estate prices really act. Is a home a good investment or not?
Inflation Indexed Bonds Performance- U.S. Treasury Inflation indexed bonds are supposed to protect you from the ravages of inflation while providing a safe and decent rate of return on your money. Obviously, since safety is generally inversely proportional to risk, if inflation indexed bonds are very safe you would expect the rate of return to be[Read More…]
