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Inflation Misses By Most In 6 Months; Core CPI Drops To 10 Year Low

Tyler Durden's picture




 

As long you don't eat, sleep under a roof, or use energy, things are positive for you as Core CPI dropped to its lowest in 10 years. Overall CPI dropped to 1.1% YoY - missing Bloomberg's estimate by the most since August. Thanks to the drought in California, food prices jumped; but energy costs overall fell despite fuel oil and other fuels rose 7% MoM (thanks to Winter storm demand). The heavily-weighted 'Shelter' index rose as did Healthcare costs.

 

CPI missed by the most in 6 months...

 

As Core CPI (es food energy and shelter)... dropped to 10 year lows...

 

Charts: Bloomberg

 

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Tue, 03/18/2014 - 08:48 | 4562511 PlusTic
PlusTic's picture

Good reason to sell treasuries.  Bizzaro world continues in full force...

Tue, 03/18/2014 - 08:55 | 4562529 Max Hunter
Max Hunter's picture

In other words, all the plastic stuff from China and Clothing from third world countries have their prices kept low.. Everything else.. not so much..

Tue, 03/18/2014 - 09:00 | 4562544 GetZeeGold
GetZeeGold's picture

 

 

Those Walmart prices should really start dropping now.....right after they reduce the container sizes by half.

Tue, 03/18/2014 - 09:30 | 4562674 DOT
DOT's picture

The convenience of a smaller package size will warrant an hedonic adjustment resulting in an implied reduction in cost.

 

Tue, 03/18/2014 - 09:49 | 4562758 valley chick
valley chick's picture

People still shop at Walmart?

Tue, 03/18/2014 - 10:18 | 4562877 elwind45
elwind45's picture

Its about 50 / 50 half shop and half live behind down by the river. Most times you barely can tell them apart except when they wear their good PJs. Your mom shops there!

Tue, 03/18/2014 - 09:26 | 4562661 Oleander
Oleander's picture

Sales of PS4 have increased this refund season. They can be used to stream live on USTREAM.  PS4 streamers worlswide are increasing and the live streams are very "enlightening".  There are more adults than liitle kids.The request to  "show bare feet" is more popular than I would have ever guessed it would be.  Pot smoking is quite common globally and racism is rampant.  No nudity that gets you banned immediately.  Very stealthly getting people accustomed to having no privacy.

Tue, 03/18/2014 - 09:28 | 4562669 firstdivision
firstdivision's picture

I look at it more along the lines of 'shit you don't need, cheap.  Shit you need, expensive'. 

Tue, 03/18/2014 - 08:49 | 4562514 Smegley Wanxalot
Smegley Wanxalot's picture

Who needs food, shelter and gas?  I gots me a 80 inch LCD bayyyybeeee!

Tue, 03/18/2014 - 09:02 | 4562554 Oldballplayer
Oldballplayer's picture

Make sure you get some rabbit ears for when you cannot afford cable anymore.

Tue, 03/18/2014 - 10:33 | 4562940 Bunga Bunga
Bunga Bunga's picture

Although in USA people pay for propaganda, brainwash will never become unaffordable.

Tue, 03/18/2014 - 08:50 | 4562517 lordylord
lordylord's picture

What is funny is that the Fed actually targets an inflation rate of 2% (actual rate is probably closer to 8%).  Can someone tell me how losing 2% of my buying power every year is a good thing?  What the fuck is wrong with people?  Can't they see through this charade?

Tue, 03/18/2014 - 08:59 | 4562545 101 years and c...
101 years and counting's picture

they wrongfully assume you'll also get a 2% raise in wages every year too.  ooops for the tens of millions of people that have seen real wages decline over the last 6 years.  ben fucked the world so badly, printing 3.3 trillion SO FAR still hasn't fixed a fucking thing.  i really wish he would be tried for treason and executed. 

Tue, 03/18/2014 - 09:11 | 4562594 holmes
holmes's picture

Hey, it's not all bad. The scum in the public sector unions get their 2% and more.

Tue, 03/18/2014 - 09:16 | 4562619 Seasmoke
Seasmoke's picture

You could have taken the "test"  

Tue, 03/18/2014 - 09:31 | 4562688 CynicalBastard
CynicalBastard's picture

Just because I can get a permit to rape the populace, doesn't mean it's just or I should lower myself to such scumbaggery.

Tue, 03/18/2014 - 09:30 | 4562680 firstdivision
firstdivision's picture

ben fucked the world so badly, printing 3.3 trillion SO FAR still hasn't fixed a fucking thing

Pretty sure it fixed things for Ferrari, Lamborghini, and Porsche sales.

Tue, 03/18/2014 - 09:33 | 4562696 CynicalBastard
CynicalBastard's picture

Clearly the solution is to print MOAR.

Tue, 03/18/2014 - 09:58 | 4562794 CouldBeWorse
CouldBeWorse's picture

Lordylord - Inflation being good or bad depends on your current lot in life.   Inflation favors people with a lot of debt and highly leveraged investments because you borrow money today and pay it back in the future with dollars that buy less.  For example, if you have 2% inflation and a 20 year home mortgage with a $1000 monthly payment,  in 20 years due to inflation the $1000 you pay will only have $667 in buying power.   The fear with deflation is just the opposite is happening.  In 20 years,  that $1000 payment has $1480 in buying power!   For those in debt they are getting dinged.  For us with savings,  deflation increases our buying power with each passing year.  The other fear with deflation is consumer will postpone buying stuff because every year the price drops (because the dollar buys more).   Why buy something today for $1 when next year it will be 98 cents?

Tue, 03/18/2014 - 13:21 | 4564074 cynicalskeptic
cynicalskeptic's picture

Used to be that the bankers HATED inflation because they were the creditors that loaned out money and had to be paid back.  

The farmers, manufacturers and others that owed the banks moeny WANTED inflation - they'd collect fair current value on their crops and just made goods while paying off their mortgages and loans with inflated money.  Back then the banks were the creditors and the rest of the economy was filled with debtors.  The Free Silver movement and Bryan's 'Cross of Gold' were part of attempts to get AWAY from the gold standard which kept inflation limited and go back to a more inflationary dual standard (all that silver found in Nevada was inflationary to the monetary system but silver was demonetized in 1873).

Today the bankers but even more so,  government, are by far larger DEBTORS than creditors, so they WANT inflation - it's the only way they can possibly pay off all the debt they hold.

But then in the good old days, you couldn't simply create money out of thin air either.  Banks and government had to solicit money EARNED by labor and the creation of real VALUE - they had to PAY for the use of capital.

Today government can create money at the press of a keystroke and lend it out at NO COST to bankers who then use that cost free or minimal cost capital to MAKE MORE MONEY.  

The money earned HONESTLY through the expenditure of labor and creation of goods and value is DEVALUED by these policies.

Savers are penalized.  Those owed money in the form of pensions see their buying power DECREASE.  Wages and incomes for the masses NEVER keep up with the rate of REAL inflation.  But those with access to cheap money, those close to the spigot - the banks and government - BENEFIT becuase they can buy tangible goods and real value with cheaper moeny and pay off debt with cheaper money.

Such policies cannot help BUT be INFLATIONARY in the long run.  An expansion of the money supply without a corresponding increase in the VALUE of the labor expended and goods produced in the economy is by definition inflationary.   

Just because government lies like mad about reality in their 'statistics' doesn't mean things are not happening.  SO far the majprity of the inflation produced by the expansion of the supply of $US has been felt overseas - driving up food, energy and commodity prices all over the world.  But as long as others (and the Fed) continue to absorb freshly issued US debt, the effects of inflation are seen more in the stock market than corner market.  But even so, we ARE seeing prices rise in the things we NEED - like FOOD - even as the prices of things we do NOT need - like electronics, expensive cars and houses - drop.

Weimar thought inflation was good too..... until it wasn't.

Tue, 03/18/2014 - 08:55 | 4562519 Wait What
Wait What's picture

you smell that? it smells like recession.

so much for the theory that QEternity was working. even by their own measures they'll have to do even more to keep this turd from sinking.

wait a minute... (lightbulb goes on above the head...)... cheeky bastards!

Tue, 03/18/2014 - 08:55 | 4562533 Rising Sun
Rising Sun's picture

the start of the depression was 2006 - real estate, followed by market collapse 2007

 

2009-current is the Fed creating cash for Wall Street while Main Street starves.

Tue, 03/18/2014 - 09:07 | 4562573 Wait What
Wait What's picture

you're not kidding. i was on a bike ride this weekend and in a 10 mile span i counted 54 unique commercial 'for lease' signs in a span that didn't incl. a couple of main thoroughfares, but did incl. almost exclusively $1 mil+ homes w/ ocean views. all that Fed money is stimulating nothing but securities markets.

Tue, 03/18/2014 - 09:00 | 4562547 lordylord
lordylord's picture

The Fed was supposed to end the buisiness cycle.  I beleive they have now achieved it.  Printing along with goverment regulation has put us in the permanent bust portion of the cycle.

Tue, 03/18/2014 - 08:54 | 4562521 El Hosel
El Hosel's picture

Inflation is clearly "contained" ..... why else would gold be dropping like a very heavy yellow rock?

Federal fuk job on all the numbers all the time.

Tue, 03/18/2014 - 08:54 | 4562528 Rising Sun
Rising Sun's picture

Hey Yellen, what's with this deflation????  Print faster bitch!!!!!

Tue, 03/18/2014 - 08:55 | 4562534 Dr. Engali
Dr. Engali's picture

Come on old Yeller crank those printers up and get us some inflation going.

Tue, 03/18/2014 - 08:56 | 4562535 Johnny Cocknballs
Johnny Cocknballs's picture

Bread and circuses cheap and plentiful, TMZ and Mario Lopez both still relevant, I think we're gonna be just fine.

Tue, 03/18/2014 - 08:57 | 4562539 Kina
Kina's picture

Pumping trillions into banksters pockets wont increase inflation.

Tue, 03/18/2014 - 08:58 | 4562542 Iam Yue2
Iam Yue2's picture

No inflation pressure, no rate rise.

So, we can now expect the Fed to keeps its zero interest rate promise up to the second quarter of 2017.......

Tue, 03/18/2014 - 11:51 | 4563422 optimator
optimator's picture

Don't worry, the FED will HAVE to increase printing to bring it up to the 2% a year goal they've been working on for years.  They must be kicking their butts in because they didn't think of this racket years and years ago.

Tue, 03/18/2014 - 09:00 | 4562548 Oldballplayer
Oldballplayer's picture

How's that stacking going?

Now imagine a deflationary collapse. That gold and silver will drop like a rock. Then the panic sets in.

You will be hanging onto that metal like that Malaysian co-pilot held onto his controls while pilot shot him in the head.

Tue, 03/18/2014 - 10:03 | 4562727 LawsofPhysics
LawsofPhysics's picture

I don't think you understand PMs, an ounce is an ounce is an ounce.

All of my mass is still very much intact and I have never had a problem exchanging that mass for goods and services.

What part of all paper goes to zero don't you understand?

Tue, 03/18/2014 - 10:33 | 4562938 lunaticfringe
lunaticfringe's picture

This is a man who thinks precious metals are measured by how much asswipe you can get for them. Mostly, this is how the world thinks.

Tue, 03/18/2014 - 14:01 | 4564309 Oldballplayer
Oldballplayer's picture

So, what are you going to trade your gold for?

The dollar is the reserve currency. And there is no clear alternative. The ruble? The yuan? Be serious.

There is not enough gold to support a world wide reserve currency.

So, the gold that I own will convert for fewer and fewer dollars.

The dream of $2000 gold is at least ten to fifteen years away.

Tue, 03/18/2014 - 10:16 | 4562870 nightshiftsucks
nightshiftsucks's picture

But isn't that the pattern,deflation then Yellen panics and we become the new Weimar.

Tue, 03/18/2014 - 11:45 | 4563373 alangreedspank
alangreedspank's picture

Not a problem. Unless your deflationary collapse scenario assumes that only gold and silver drops, but then, this would not be a "deflationary collapse".

Tue, 03/18/2014 - 09:04 | 4562565 1stepcloser
1stepcloser's picture

So cat food is getting cheaper?

Tue, 03/18/2014 - 09:12 | 4562606 Seasmoke
Seasmoke's picture

Actually it is. Fancy Feast used to be .70¢ a can, is now .50¢ a can. Zack, my cat, loves the Federal Reserve. 

Tue, 03/18/2014 - 09:20 | 4562635 robertocarlos
robertocarlos's picture

Fancy Feast is people!

Tue, 03/18/2014 - 09:36 | 4562702 ClowardPiven2016
ClowardPiven2016's picture

Friskies is up to .50 from .46 a couple months back, an 8% hike. Poor Grandma...I guess she'll have to start eating less.

Tue, 03/18/2014 - 09:17 | 4562624 Azannoth
Azannoth's picture

In other news the price of Private Islands increased by 5.5%, Vintage Wines( > 1000$ per bottle) by 8.2% and Premium Caviar by 7.9%, Inflation is a Biatch eh?

Tue, 03/18/2014 - 09:18 | 4562630 robertocarlos
robertocarlos's picture

Those of us in the deflation camp are winning. Only hyper-inflation can defeat us.

Tue, 03/18/2014 - 09:26 | 4562663 nakki
nakki's picture

Like I've said before when you strip out everything that people use on a daily basis, take out health care, property taxes, and education you are left with bullshit junk that most people have anyways. As for rent when I was renting it never went down only up usually 5% a year. The idea that energy and food are "volatile" and thus be striped out is so disingenuous, that any numbers that don't include them is just plain fraud.

 

Tue, 03/18/2014 - 10:46 | 4562992 elwind45
elwind45's picture

There are components of both in the numbers? Without the mortgages the bank has to borrow from the Fed instead of placing mortgage directly in the till and loaning against it? The process makes it difficult to borrow any capital in quantity and makes big purchases near impossible. The growth capital is impossible to obtain and expensive? Which forces individuals into credit and the victims of a thousand cuts? The bigger the item cost wise the less its worth? I complain about apples going up but not my residence?

Tue, 03/18/2014 - 09:30 | 4562673 Satan
Satan's picture

There has never been a better time to be unemployed and homeless...

Tue, 03/18/2014 - 10:31 | 4562912 elwind45
elwind45's picture

Do you like adventure can you get a GED do you like parades?

Tue, 03/18/2014 - 10:46 | 4562997 snakedogs
snakedogs's picture

The width of Toilet Paper is due to shrink by an inch. You can still wipe your ass with greenbacks!

Tue, 03/18/2014 - 10:50 | 4563031 elwind45
elwind45's picture

The idea that food and energy are left out is more for reporters than reporting?

Tue, 03/18/2014 - 11:06 | 4563142 elwind45
elwind45's picture

It wasn't more than ten years EVERYONE WAS SITTING ON A SMALL FORTUNE OF real unrealized gains that did evaporate? Now a new group of unrealized gainers has reappeared and prices are going up? Oops blame a president any president move on?

Tue, 03/18/2014 - 11:11 | 4563167 elwind45
elwind45's picture

9 years and still the fed is merrily sucking your wealth out the system and this little morsel is still news. Wait the big stuff going down HOW?

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