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Inflation: Here's what's becoming more expensive

With   inflation   running hot in October, American consumers paid slightly more for most goods and services compared to the previous month, and far more compared to a year ago. The Labor Department’s consumer price index (CPI), a key inflation gauge that measures how much Americans pay for goods and services, rose 0.9 percent over the month in October and 6.2 percent over the year, with the annual figure reflecting the highest pace of price hikes in nearly 31 years. The agency’s report ( pdf ), released Nov. 10, breaks down how much prices have increased for certain key services and goods, including gas, food prices, electricity, and used cars. Seasonally adjusted figures are only available for the month-over-month comparison, while seasonally unadjusted data is available in both over-the-year and over-the-month formats. Gasoline : 49.6 percent year-over-year and 3.7 percent month-over-month seasonally unadjusted; 6.1 percent month-over-month, seasonally adjusted Fuel oil : 59.1 perce

Inflation Still Hot. Doesn't Look Very "Transitory"

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Six months ago, any inflation was supposed to be transitory, meaning just temporary. But it seems to persist. I also think it's very strange that the government also reports inflation minues "food and energy." Do these people not live in the real world? Anyone know of a family budget that doesn't have a large part taken by "food and energy?" Anyway, I digress. The Consumer Price Index (CPI) rose 0.9% month-over-month (m/m) in October, above the Bloomberg consensus estimate of a 0.6% increase. The core rate, which strips out food and energy, increased 0.6% m/m, above the 0.4% expected, and following September's unadjusted 0.2% rise. Y/Y, prices were 6.2% higher for the headline rate, north of forecasted 5.9% rise and the quickest acceleration in 30 years. The core rate was up 4.6% y/y, above the projected 4.3% gain and August's unrevised 4.0% increase. The Bureau of Labor Statistics (BLS) said that the monthly all-items increase was broad based, and t

Right-to-Work; Energy Crisis; Caving to Unions; Weaponizing the IRS

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Buried in the Budget Reconciliation Is the End of Right-to-Work, Independent Contractors; Climate Change Among the various major provisions of the PRO Act is effective nationalization of California's AB5 law that passed in 2019. This law makes hiring independent contractors much more difficult and specifies that contractors must be reclassified by businesses that hire them as employees, unless they meet specific and rigorous standards allowing them to stay independent. Read full article... Biden on Energy Crisis: Begging Others to Save Him From Himself It is on the costs of energy where Biden’s failures are most starkly visible. On his very first day in office, Biden scrapped the Keystone XL pipeline, killing 11,000 jobs in the process and making good on his campaign promise to be hostile to the fossil fuel industry. Continuing his assault on natural resource development, Biden suspended oil and natural gas leases in Alaska. Former President Donald Trump had propelled America to en

Democrat's destructive spending spree would turn America into European Social Welfare State

One of the current issues facing the U.S. economy is more demand than supply can keep up with. Part of the issue has been government programs that have incentivized workers to stay home, and the result is a labor shortage and a record number of job openings, while the workforce participation rate drops to the lowest in decades.  In the meantime, Democrats on Capitol Hill have been busily working on a new spending package.  The cradle-to-grave subsidies in the 2,448-page, $3.5 trillion spending bill that Democrats in Congress are crafting will create a welfare trap for millions more Americans, send inflation soaring, and drive our nation much deeper into debt. Economic policy professor Chuck Blahous of the Mercatus Center at George Mason University analyzed the health benefit proposals in the spending bill. He wrote that expanding Medicare, Medicaid, and “so-called Obamacare” will “represent a major escalation of the fiscal irresponsibility lawmakers have practiced for the past several

The problem hasn't been demand, but supply

As the months drag on, it's increasingly clear that Covid is more of a supply shock than a demand shock to the U.S. economy. Do you remember the endless stories about supply chain problems after the 2007-08 financial crisis? Nope. Neither do I. Because they didn't exist. Did we have soaring prices after 9/11? Nope. Container ship shortages after the dotcom collapse? Of course not. All the recent crises we've dealt with have been negative demand shocks to the U.S. economy. And that has empowered the Keynesian approach of filling demand drops with government stimulus--or consumer spending, as in the case of 9/11, when President Bush famously told families to go about their lives ("fly on airplanes...travel...Get down to Disney World") in order to keep the economy from worsening.  So naturally, when Covid hit, and people worried about a second Great Depression, policy makers threw more stimulus at the problem than ever before. But Covid is more and more a supply shoc

Producer price inflation not as hot as expected, jobless claims fall below 300,000 mark

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The Producer Price Index (PPI) showed prices at the wholesale level in September rose 0.5% month-over-month (m/m), below the Bloomberg consensus estimate calling for a 0.6% gain, and south of August's 0.7% increase.  The core rate, which excludes food and energy, gained 0.2% m/m, below estimates of a 0.5% rise and the prior month's 0.6% gain. Y/Y, the headline rate was 8.6% higher, just shy of projections of an 8.7% increase and compared to August's 8.3% gain. The core PPI increased 6.8% y/y last month, south of estimates calling for a 7.1% rise, and following August's 6.7% increase. Weekly initial jobless claims came in at a level of 293,000 for the week ended October 9, versus estimates of 320,000 and compared to the prior week's upwardly-revised 329,000 level. The four-week moving average fell by 10,500 to 334,250, and continuing claims for the week ended October 2 dropped by 134,000 to 2,593,000, below estimates of 2,670,000.  The four-week moving average of con

A Weak Jobs Report: The Devil Is In The Details

Stocks and U.S. Treasurys fell Friday after a weak jobs report added to speculation about the Federal Reserve's plan to taper its bond-buying program. September was the slowest month for job growth this year, with just 194,000 jobs added compared to consensus estimates for a half-million, signaling a slowing of the labor market recovery and perhaps complicating the Fed's decision on when to begin scaling back monetary support. Inflation concerns pushed long-term interest rates higher, with the benchmark 10-year yield rising to 1.61% after adding 15 basis points on the week. But the three major stock market indexes finished modestly higher for the week, recovering from steep early losses after the U.S. Senate agreed to raise the debt ceiling for at least a few more weeks. The unemployment rate fell, but so did the important labor force participation rate, which has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. And the number of people who are no