The U.S. Bureau of Labor Statistics (BLS) released their monthly inflation report for July on August 16th. According to the BLS Annual Inflation declined for the third consecutive month. Annual inflation was 1.13% in April, 1.02% in May, 1.01% in June and 0.84% in July. Not only did the rate of inflation fall but actual consumer prices declined as the CPI-U index declined from 241.038 to 240.647. Thus monthly inflation was -0.16%. For the year food at home was down -1.6%, energy was down -10.9%, used cars and trucks were down -3.7%, while overall transportation was down -4.9%. With all of these categories down one might wonder what actually caused the inflation rate to rise that meager … [Read more...]
Inflation, Economy, and the US Election
One of the major factors affecting an election's outcome is the nation’s economy during the election year. In terms of trading and from an investment standpoint, financial security is a huge issue. But unlike recent election years, forecasters predict a strong economy in 2016 during the presidential race. Economic conditions can change however, depending on which candidate wins. With the US Presidential Election still a good six months away (November 8, 2016), how will it affect inflation and the economy as a whole? Low Unemployment Rate Researchers in political science, project that unemployment will be at its lowest, since the election in 2000 (Bush versus Gore) when it was at 3.9%. … [Read more...]
January Inflation Up Sharply Should You Worry?
The U.S Bureau of Labor Statistics released their monthly inflation report today covering the 12 months ending in January indicating a massive jump in inflation. Should you worry? Current inflation (CPI-U) nearly doubled from 0.73% to 1.37%. The Consumer Price Index was 236.916 up from 236.525 in December. According to the BLS, the rate of decline for Energy has slowed a bit last month. Energy was down -12.6% in January, but only down -6.5% over the previous 12 months in February. Gasoline is only down -7.3% this month compared to -19.7% last month, while Fuel Oil is down -28.7% compared with -31.4% in December. The only energy commodity that is down more than previously is … [Read more...]
Deflation Returns in September
The Bureau of Labor Statistics (BLS) released their inflation numbers for the year ending September 30th on October 15, 2015. Monthly inflation was negative (disinflationary) for the second month in a row resulting in annual deflation of -0.04%. Although at this level the deflation is so slight that the BLS rounds it to Zero. So basically prices are on par with those of a year ago. However, that doesn't mean that all prices are identical to those of a year ago. In the report issued by the BLS yesterday we note that food prices are up 1.4% over a year ago while energy prices are down -18.4%. and all other items excluding food and energy are up 1.9% so we see that the primary cause of the … [Read more...]
US Consumer Spending vs. FED Inflation Decision
The Fed will meet on the 16th and 17th of September to decide whether it’s time to normalize its accommodative monetary policy. But despite vice-chairman Stanley Fischer’s hints at an inflation increase in September, analysts still think that several factors complicate the FED’s decision. Recent turbulence in equities markets across the globe as well as uncertainties about China’s market are only some of the factors putting a damper on the economy. During an Economic Policy Symposium held in Wyoming this August, central bankers discussed how inflation would finally rise despite these issues. After all, the factors that had been holding it down (including fading oil prices, downward … [Read more...]
A Very Weak Economic Recovery
By Elliott Wave International Editor's note: The following article is excerpted from Elliott Wave International's new free report, "U.S. Economy Still on Life Support." For years, the government has manipulated its unemployment statistics to line up with its claim that the economy has recovered strongly. But that's not ALL the government is hiding from you. From foodstuffs, to crude oil prices, to GDP, the numbers and analysis reported by the government and mainstream financial press are misleading at best, downright falsehoods at worst. Get the hidden truth -- click here to read the full two-part report now >> For years, the government has been manipulating its unemployment … [Read more...]
Poverty Matters for Capitalists
Having taken Thomas Piketty to the cleaners a few weeks back (see “Gave & Gave … and Hay”), Charles Gave now redresses the balance with regard to the issue of economic inequality in today’s Outside the Box. He makes a forceful case that “poverty matters for capitalists”: Every US recession that I can recall was preceded by a fall in long rates, and I doubt the next will be much different. As such, do not expect the next US downturn to arise from the Federal Reserve pushing rates higher, an overvalued dollar or even mal-investments. Expect it to result from a decline in the income of the working poor. Early warning signs are likely to show up in the shopping aisles of stores such as … [Read more...]
How Low Inflation in Europe Could Affect Your Investments in the U.S.
Last December, we explained why central bankers are terrified of economies that slip into a very difficult to stop deflationary spiral. European policymakers are not yet terrified, but it is fair to say they are concerned about what has been persistent low inflation. From Reuters: Euro zone price inflation fell unexpectedly in May, increasing the risks of deflation in the currency area and all-but sealing the case for the European Central Bank to act this week. Annual consumer inflation in the 18 countries sharing the euro fell to 0.5 percent in May from 0.7 percent in April, the EU’s statistics office Eurostat said on Tuesday. Fed Casts A Wider Economic Net Unlike the … [Read more...]
What are Excess Reserves and How Could they Spark Inflation?
How can you possibly have too many reserves? You would think that the more reserves the healthier the institution and so there would be no such thing as "excess reserves". We've mentioned this in previous articles such as FED Looks for New Ways to Crank Up Money Supply and How “Excess Reserves” and the Money Multiplier Could Trigger Inflation but excess reserves are in the news once again as Philadelphia Federal Reserve Bank President Charles Plosser says that that "excess reserves" could push inflation dramatically higher. Well, we have been telling you that for quite some time so it shouldn't be news to long time readers. But if you are new to InflationData... What are Excess … [Read more...]
Various Methods of Calculating Inflation
Why are There So Many Different Ways to Calculate Inflation? We've all heard the old saying, "Figures don't lie but liars figure" or perhaps "You can make numbers say anything you want". Both of these sayings contain the underlying assumption (or at least possibility) of malicious intent. But even if you have the raw data and just want to get at the truth, number calculations can present difficulties because the answer you get can depend on how you analyze it. For instance, you would think that if you want to know the "average" income of a group of 10 people it would be easy to calculate. And if all the incomes are relatively closely grouped it is easy... simply add them all up and … [Read more...]
