CPI

World Trade Growth Expected To Decline From 4.9% To 3.7%

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The Personal Income and Outlays report is widely followed because it provides information on the two most important factors in macroeconomics: inflation and consumer spending. Even though it is delayed, the Fed watches this inflation reading the closest, thus making it very important. Month over month August PCE inflation was…CONTINUE READING

Inflation Falls: Is The Economy Even Late Cycle?

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As we previously discussed, real wage growth is becoming a reality, having appeared in August. Average hourly earnings were up 2.9% and weekly earnings growth was 3.2%. Inflation stats have come in below expectations as we will discuss in this article. Before we get to that, it’s worth noting that…CONTINUE READING

New Risk Resistant Economy

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Recency bias is causing many investors and economists to believe we are in a new era of uncertainty because of the dot com bubble and the 2008 financial crisis. It’s like saying inflation would always stay high after the bout of inflation caused by monetary policy mistakes in the late…CONTINUE READING

Core Inflation Hasn’t Done This Since 2008

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Inflation could be the most important metric to follow because if it gets too high, the Fed will need to accelerate rate hikes which could cause a yield curve inversion and later a recession. One very important thing to keep in mind before we analyze the inflation numbers is the…CONTINUE READING

Gold vs Inflation: Not What You Expect

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We’ve had some readers question the Fed’s use of CPI as a measurement of price inflation. The chart below might satiate them as it shows the eight components of CPI. Medical costs have pushed inflation higher. Keep in mind, this is over a 17 year period. We’re not ignoring the…CONTINUE READING

Buying/Renting Home vs Investing In Stocks

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The conventional wisdom during the baby boom generation was that buying a house was a ticket to financial freedom. Because policy makers believed in this concept, since the late 90s there was an aggressive attempt to get people into homes they couldn’t afford. Obviously, over leveraging yourself with the purchase…CONTINUE READING

Consumer Prices Rise Highest Since 2007

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One of the major trends of 2018 is likely to be the acceleration of inflation growth, as we have discussed previously in the following articles: Why Inflation Will Increase In 2018 Long-Term Inflation Pressures The Fed has longed for inflation for years because it consistently has been below its goal…CONTINUE READING

Price Inflation Distribution Is Not Uniform In US

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Price inflation is one of the most important economic metrics as it affects the purchasing power of the consumer, monetary policy, and asset valuations. Those who quibble with which metric is the most important try to determine which one is the catalyst for others. That’s like asking whether the chicken…CONTINUE READING

Why Inflation Will Increase In 2018

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The Perfect Scenario For Stocks With the economy regaining steam in 2017, the number one risk to equities and economic expansion is inflation. The current economic expansion hasn’t produced inflation, as measured by core CPI, because the growth in inflation as a result of QE has been subdued to mainly financial…CONTINUE READING