Inflation Fears Spike To 30 Year Highs

Hidden deep in the narrative-busting Philly Fed survey plunge this morning was an alarming data point that may better explain the slump in stocks than mere disappointing headlines would suggest.

While Prices Paid and Prices Received both rose modestly (even as New Orders and Backlogs plunged), it appears Trump Trade Tariffs have sparked a Daimler-esque response in the business-people of Philadelphia who are now more worried about inflation in the next 6 months than at any time since 1988 (shooting up a whopping 23 points to 56.6)...

But what the chart says is more concerning for the average joe as this is the bank’s six-month outlook index for prices received by producers - in other words: what consumer prices are expected to do.

While the gauges are volatile and expectations often differ from reality, Bloomberg notes that the increase is consistent with the trend of budding cost pressures and shows manufacturers are going to test the end-market’s tolerance of higher prices.

So, should Treasury yields be anxious about this? You decide...

As MacroTourist Kevin Muir retorted previously: "It’s foolish to believe that the end-game is anything but inflation."

Comments

SACRED-COW ted41776 Thu, 06/21/2018 - 15:39 Permalink

Prices on building materials, such as, Western red cedar, for building fences are not only in short supply, but, have increased up 50% in the last 12 months.  There are usually three price increases at the beginning of each building season.  Suppliers have warned that there may be a price increase every month this year.  Of course, it is all just part of our collective imagination since "they" have assured us that inflation is running steady at about 2%.  Maybe we can evolve to eat flat panel t.v.'s going forward.

In reply to by ted41776

hoist the bs flag Thu, 06/21/2018 - 14:50 Permalink

no worries bitchez. my silver and gold has been flat for years as well as the price of ramen noodles ...adjusted for hedonics.

Baltic Dry is still in the toilet

what is this imaginary street inflation they speak of? food? housing? gas?...medical?

tisk tisk

Lie_Detector Thu, 06/21/2018 - 14:58 Permalink

My expenses are up about 20% since the New Year. Auto insurance up over 20%. Potato chips up about 180% (mainly for my wife's lunch at work). Many food items up 10% to 50%. Soda up between 20% and 60% (or even more), and thankfully I do not buy much. Gasoline up about 50%. You get the picture. My pension up 2%.  

hoist the bs flag Lie_Detector Thu, 06/21/2018 - 15:03 Permalink

clearly you haven't adjusted for hedonics or the New World Order of personal finance.

try ramen noodles, no chips ( pork rinds are yummy) stop paying auto insurance and ride bikes and public transportation. stop drinking soda for christ sake..that shit is poison ( come to think of...Ramen noodles are too.)

see! inflation solved. oh yeah, forgot...no running the AC in the summer. think of the house as a "detox sweat lodge"

do these things...and your government and corporate masters will thank you.

In reply to by Lie_Detector

GeezerGeek hoist the bs flag Thu, 06/21/2018 - 15:22 Permalink

Electronics, particularly computer stuff, is getting cheaper. In particular, storage is more affordable than ever. Hard drives and solid state storage drives are bargains. First-generation AMD Ryzen CPUs are available at huge discounts after only one year on the market, something Intel never allowed to happen. 4K TVs are available at low prices for base models. Etc.

Too bad we can't eat electronics, as the price of beef rises every time I look. (Perhaps I should stop looking.) And the tariffs on Chinese stuff haven't kicked in yet, so there's that.

As long as the USSA can print more money we'll get by.

Totally off topic: Earlier today I was doing some benign computer forensics stuff and happened to ping zerohedge.com. What I got was totally unexpected: 64 bytes from 252.58.227.35.bc.googleusercontent.com (35.227.58.252) was what came back. Not just a simple 252.58.227.35, so what in the dark web is "bc.googleusercontent.com"? Do other people get this response to a ping? Is the DNS server I use screwing with me, or is everyone now a slave to the Goolag?

In reply to by hoist the bs flag

Lie_Detector hoist the bs flag Thu, 06/21/2018 - 22:25 Permalink

In Michigan you CAN NOT GET TO WORK without a car. There is almost no bus service. The weather makes it life threatening 

many days EVEN WITH A CAR. I have had many close calls (head on collisions) when other cars lose control and slide straight at you at speeds from 30 to 70 miles per hour. Even in nice weather I have had several times where I had to get off the road or be hit head on. Walking and bikes are ok in warm weather but there are no sidewalks in many areas. I have to run across a 5 lane road to get to a grocery store (and I usually do this several times a week). 

In reply to by hoist the bs flag

GeezerGeek Rainman Thu, 06/21/2018 - 15:29 Permalink

Let us thank Barry, Nancy, Chuckie and the Koch Brothers for bringing in countless illegal, low-cost laborers and foreign tech workers to keep wage costs low so consumers get a price break.

Wow. Just wow.

Can we please have a law requiring that a progressive offs itself every time an illegal invader shows up here? At least it would make the population more stable for a while, and it may even make me feel better about illegal invaders.

In reply to by Rainman

Lie_Detector GeezerGeek Thu, 06/21/2018 - 22:37 Permalink

The Koch brother bought the plant I used to work at. They paid the same wages as the company before did, MUCH better than average in the area the plant was in. It closed in 2015 due to the supplier of the raw materials losing it's ability to supply enough ethylene and propylene (raw materials delivered by pipeline). Plant was closed and crushed up (and sold off as scrap metal). 

In reply to by GeezerGeek

Salmo trutta Thu, 06/21/2018 - 15:06 Permalink

Technically and paradoxically, there is no such thing as the "wage-price spiral"; the "price-wage spiral"; or the "cost-push spiral", in the sense that increases in wages, prices, or costs are causes of inflation.

 

Unless effective demands (money times its velocity) are adequate to prevent a cutback in sales, or a diversion of purchasing power to the price raisers, any administered increase in prices will result in less sales, smaller outputs, less employment, lower payrolls and less demand for products—in other words, depression and deflation in due course.  It’s about consumer’s market basket substitution, the elasticity of demand.

 

The current *administered* price increase by oil producing countries have not been *validated* by any of the world's Central Bankers (which is just the opposite of the reaction by the Fed during the 1973-1974 OPEC cartel price increase, which back then, *more* than validated OPEC’s administrated price hike). 

 

Therefore these current attempts to permanently increase prices will be transitory –will be deflationary, not inflationary.  An administrative price hike is just the opposite of price control restrictions, like the one President Gerald Ford urged to curb / outlaw inflation : “Whip Inflation Now (WIN) in 1974, or also rent controls, Seattle’s minimum wage hikes, etc.

 

That is why there was an unusual reverse divergence in the marketplace between gold and copper as opposed to oil. This too shall pass.

Quivering Lip Thu, 06/21/2018 - 15:08 Permalink

Don't worry I'm sure they'll just keep on telling us inflation is only running at 2% .

If not they'll just use seasonally seasonal and hedonic quality adjustments to tell us we're all hallucinating about paying more for everything.

KarlGDenninger Thu, 06/21/2018 - 15:14 Permalink

Ive been noticing price hikes all over. $2 value meals are now "FIVE DOLLAR FILLUP BOXES" at fast food stores. A SYP #2  -  2 x 4 now costs $5 (when it cost a buck ninety 2 years ago)

 

And beer. My precious beer. A 16 ounce 4 pack of Bud-light used to go for 4.69 forever (from 2013-2018) Sometime in the spring they upped the price to $5.99. This doesn't make sense budlight is as popular as ever and production is practically automated (the grain prices went up)

 

Hopefully this is not a trend. Dont think anybody is prepared for 70's style inflation.

Seasmoke Thu, 06/21/2018 - 15:17 Permalink

Inflation fears ???

The Price of Gold and Silver laugh at your fears   

 

Got Gold ?? NO..Ok, can't say I blame you. It hasn't hurt you YET. 

DingleBarryObummer Thu, 06/21/2018 - 15:24 Permalink

The FED cannot keep up with inflation without busting the bubble.  They are painted into a corner.  FUBAR bitches.  Moar QE, hyperinflation, destruction of dollar, and implementation of digital one world currency; that's ((their)) plan.