Posts filed under “Inflation”

Inflation Ex-Deflation (this time, INCLUDING energy)

Here is a twist: We used to discuss how the Fed loved their core (ex food & energy) inflation measures. I termed that Inflation Ex-Inflation, and if you look around TBP, you will see lots of mentions of that measure.

Take a closer look at Energy, one of the biggest non-housing components. As noted this morning, Commodities have entered a Bear Market. Gas & Oil are not contributing much inflationary pressures. If anything, Energy costs now are acting as a drag on Inflation.

Call it Inflation Ex-Deflation (Do you want to guess what that means for the Fed’s love of the Core Inflation (ex food & energy)?

Consider the Federal Reserve inflation target of 2.0%. Jim Bianco notes that inflation is moderate at 1.73%. However, if you take a closer look at the chart below of core CPI — you will see a 2.3% on a year-over-year basis (blue line) and a heady 2.71% on a three-month annualized basis (red line).

Sum it up and it means inflation less energy is largely running above the Federal Reserve’s target.

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Energy Now A Drag On Inflation

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Source: Bianco Research

 

 

More charts after the jump

 

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Category: Energy, Inflation

Emerging Markets, Not Inflation Drives Gold

Click to enlarge:     Kudos to Bloomberg’s Dave Wilson for spotting this study last week by Duke University Professor Campbell R. Harvey and his collaborator, Claude B. Erb. They discovered that “Gold’s prospects are less dependent on inflation than on demand from emerging markets.” As the chart above shows, “The relationship between gold and…Read More

Category: Gold & Precious Metals, Inflation

The Not So Golden Years, Revisited

Over the years, debate has waxed and waned over the effects of the minimum wage and/or immigration policy on employment, particularly teen/youth employment. When the issue flared up most recently, a couple of years ago, I posted a rebuttal to that argument here, my point being that it was – at least this time around…Read More

Category: Contrary Indicators, Cycles, Data Analysis, Economy, Employment, Inflation, Really, really bad calls

Will Soaring Rents Lead To Higher Core Inflation?

Chicago Real Estate Daily – Rents rise again in sizzling downtown apartment market Downtown apartment rents hit another high in the first quarter, and more hikes may be in the offing amid a red-hot rental market. The average effective rent at top-tier, or Class A, downtown apartment buildings rose to $2.50 a square foot in…Read More

Category: Inflation, Real Estate, Think Tank

MIA: Bond Vigilantes

Following up on a previous matter, Karl Denninger  posted what is supposed to pass for a rebuttal to my recent post on government spending. To my eyes, as Jay Bookman so aptly put it, it looks like “the octopus trick, squirting black ink to cloud your retreat.” True enough. Anyway, done with that discussion. Paul…Read More

Category: Contrary Indicators, Data Analysis, Economy, Inflation, Markets, Really, really bad calls

Wow! Bundesbank “accepts” higher inflation

Australia’s unemployment rate declined to a one year low of 4.9% in April, from 5.2% in March and as opposed to a rise to 5.3% forecast. However, the data reveals that the decline was caused by an increase in part time employment (+26k), with full time unemployment down (-10.5k). The A$ rose on the news….Read More

Category: Inflation, Think Tank

Great Britain as a case study: which sticky price?

Steve Waldman was a software developer who became fascinated by finance and started writing about it. He is now a doctoral student in finance at the University of Kentucky. He blogs at Interfluidity. ~~~ Richard Williamson offers a report from the UK. Combining bits via Tyler Cowen and Williamson’s own excellent blog: I think there…Read More

Category: Inflation, Think Tank

Questioning The Measurement Of Inflation

Click to enlarge: Bloomberg.com – CPI Conspiracy Theories Persist Even With Broad Checks Maggie Humphrey, a price collector for the Bureau of Labor Statistics, visits the same grocery store every month in the Chicago suburbs to punch the cost of a pound of bananas into her Lenovo tablet computer. “That price has not fluctuated since…Read More

Category: Inflation, Think Tank

Hours of Work Needed to Purchase: CRB, SPY, Gold, Oil

From Ron Griess and the always fascinating Chart Store, we see a very different read of inflation.

He shares this awesome selection from his weekly blog (subscription only) of commodities,  crude oil, copper, gold, silver, corn, coffee, cotton, and the S&P500 — all priced in terms of hourly earnings:
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Category: Commodities, Gold & Precious Metals, Inflation

The FOMC Minutes …QE3 And Inflation

Click to enlarge: ˜˜˜ The Wall Street Journal – John Hilsenrath and Matt Phillips: Fed Holds Fire on Stimulus The Fed is in no hurry to launch new measures to boost economic growth, minutes from the central bank’s most recent meeting showed, disappointing investors eager for more stimulus. Among the hints dropped in minutes of…Read More

Category: Bailouts, Federal Reserve, Inflation, Think Tank