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CPI Drops, Misses By Most In 14 Months
If there was another reason for the Fed to keep its foot 'through' the floor, it is the fact that despite a record growth in the Fed balance sheet YoY, CPI (ex food and energy) dropped to 1.7% and missed by its biggest margin in 14 months. This is the 2nd lowest print in two-and-a-half years. Perhaps most dismally, real hourly wages rose at only 0.9% year-over-year - around half the rate of inflation. Overall, energy costs rose the most MoM (+0.8%) while Apparel fell 0.5% MoM (its biggest drop in 6 months as we suspect the JCP-driven sales deflation has begun already); and given Sebelius' testimony today we note that healthcare costs are up 2.4% YoY (almost triple the rate of wage increase).
CPI YoY Ex Food and Energy saw its biggest miss in 14 months...
As overall CPI also dropped with Energy and utilities costs rising the most...
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1800 S&P when they go to 100 bil plus today
gold will "soar" above 1355 for several minutes at least.
fonz
is that hour minutes or oligo seconds?
Tylers: How does this CPI drop correlate with expected GDP?
Thanks!
HB
Is that Government Deployed Propaganda?
Oh yeah. Medical expenses are only up 3.1% this year. My health insurance is about to double due to Obamacare. When will that show up in the numbers?
Just like food and energy, the .gov will ignore the cost of the only things that are required in order to actually do real work or create anything of real value. This should turn out well. Perhaps I can interest you in a financial "product" of mass destruction?
Just like all other fudged data , this CPI one is fucking bullshit. Governments have been fiddling the 'basket ' of goods measuring true CPI , to fit with their zirp policies.
Also if the CPI was high, so are the COLAs for SS.
pods
maybe they should count intangibles too....like...I spent $50 on 20 ounces but I meant to get 30 ounces.
no inflation there.
" Real hourly wages rose at only 0.9% year-over-year - around half the rate of inflation."
Okay... okay which one of your cash hoarding multi-national corporations is being stingy with raises?
Really? All of you????? WTF
Hmm, let's review our options. We could admit that QE only boosts asset prices and does nothing to consumer goods and employment. Or, maybe we should just double the size of QE, just in case.
When in doubt, double down......
170T/month! Onward!!!!
fonz
Been at 1355 and above for a while now!
From the depths of Hell, it's BERNANKENSTEIN!
WINNING. USA, USA, USA. WHOOP-DA-FUCK-EEEE
Hey Canada your very own Central Bankster say MOAR
Stephen Poloz: Quantitative easing has strengthened the U.S. economyhttp://business.financialpost.com/2013/10/29/stephen-poloz-quantitative-...
Deflation swirls in the middle of the eddy while inflation swirls outside.
Energy and utilities increase are battering businesses, any wonder why employment is in the crapper!
.... Sorry fella that is no swirl, that is the tip of the Taper receeding back into Benny's bungholeyo. The Fed will buy all the paper and make your crapper look dapper.
@XAU XAG
Energy prices up and PSX can't even beat on EPS.
Who needs a playtstaion when the biggest play area is mother nature and no EPS required!
Deflation is a myth. No society/currency has ever collapsed/died because their purchasing power became too strong. Ignore everything priced in fiat (which is everything today) and focus on the 7+ billion (and growing) all fighting for a better standard of living, there is plenty of demand for the real commodities and calories required in order to create anything of real value.
In the meantime perhaps I can interest you in a financial "product" of mass destruction?
No society/currency has ever collapsed/died because their purchasing power became too strong.
I think this is a misnomer... Purchasing power has an inherent governor given the currency appreciation will inevitably be utilized to scrounge up goods/services/resources... so, it never could cause collapse... it's an impossible standard.
Deflation is not a myth... it does exist... however, it tends to only exist in spurts and be eventually overshadowed by monetary policy. This is why hedging only for inflation may lead to huge losses in the meantime.
Deflation is more of a symptom than a threat.
Permitting a little bit of deflation in the USA (via a stronger dollar via less QE) might actually help average Americans to increase their disposable income - which, in turn, could be a subsequent stimulus to the economy.
In a world of central planning, I'm not sure how changes in the money supply can be anything other than a cause (instead of a symptom), but I digress...
"Deflation is a myth. No society/currency has ever collapsed/died because their purchasing power became too strong."
Tell that to the Easter Islanders. Except that your last clause takes your case right out of the definition of "deflation." Deflation exists when prices are falling BECAUSE purchasing power is decreasing. I don't know where you might be looking to find numbers supprting a rising purchasing power...
Easter Islanders, huh? How much purchasing power did they have saved up in those big headed statues?
It's hidden 'add-ons' that are choking us like killer weeds....for example utilities and water just 'added-on' a 15% fee....probably not reported as 'price' I'm sure it's a different 'category' ya know.
Stagflation Bitchez!
BULLISH!
Trick or Taper?!
Did some low level staffer change the CPI calculation? Why the big miss? With ficticous numbers ti should be really easy to predict. Not sure what went wrong. Unless Bernak needs this to support his $100B un-taper.
Exceptionalism Money Print Wall Street scamming Economic!
"ex food and energy" - Yes, we are going to ignore the cost of the only thing that is required in order to actually do real work or create anything of real value. This should turn out well. Perhaps I can interest you in a financial "product" of mass destruction?
If we can exclude shelter, then we will no longer count anything required to live!!
Things sure seem to be spiraling out of control at a much quicker pace.
Whoopie. I can afford more of the things I don't need.
I don't know about you guys but food and energy are my biggest expenses after housing and these two items have increased the most over the past few years.
What would inflation be if they were included and why are they excluded?
@Australian Economist
Not sure about all countries but in the UK many things like state pensions and now state handouts are linked to RPI or CPI, the lower the rate the less government has to shell out, but don't expect a decrease in taxes!
My guess is inflation is running at about 10% that means in ten years all debt would be wiped out if only GDP growth was 10%
Dow 16000 can't be long now...their plan is working, despite those meddling kids (ZH).
Or, that's JUST what they want everyone to think. I'm not believing a bit of any of this cheap gypsie carnival.
Dunno - like some have opined here, we know this is going to keep going up until one of two things:
1) Obama finishes his term
2) IF the right wins the midterms and starts imposing changes
Obama MUST be seen as a 'god'...a natural born healer. So the story was written...
Heh heh....yea I recall those old days when everyone and their cousin was writing that the year long pumping to DOW 10,000 was 'just for the elections, gotta get Obomber secured in there then all bets are off', and after that reality would come crashing back in. Just why I pay no mind to any of this crap and just wait for the day they pull the rug out again when they feel like it. That's all that matters, not political parties or elections or anything else but what the banks feel like doing.
5 years of printing their ass off and all we got was this obama phone and 1.7%
Verizon can fix that.
How come everything I buy only goes up in price?
"Perhaps most dismally, real hourly wages rose at only 0.9% year-over-year - around half the rate of inflation."
Misleading. you already state that the increase in wages is "REAL", hence adjusted for inflation, in other words with the increase in inflation subtracted out. So the "NOMINAL" increase was greater than inflation or it would not have left a positive residual for "REAL". So this sentence is basically nonsense. Great writing on the site generally but this one requires adjustment
I told you, I ain't buying shit.
It's the Cheryl Ladd collection. And I got it at JC.Penny, on sale!
I don't think their plan to inflate their way out of this mess is going too well.
How does the second chart work? CPI-ex energy and food is down; energy and food are up; all items are more down?