CPI And Retail Sales: Oops

[traelin0]

This isn't good folks.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.5 percent before seasonal adjustment.

The big gains here were in energy, up 4.6%. Coming right into the cold months this is not helpful. Not only was gasoline up 9.5% but fuel oil was up 4.9, which in the Northeast is a primary fuel. Natural gas was also up 1.4%.

A look inside the data tables confirms - energy and to a lesser extent food is where the action was this month. The frightening subindex is the energy commodity one, up 7.5% this month alone.

If that's a one-month blip then we'll get through it. The danger is that it's not, and what we're seeing is a secular shift taking place as a consequence of The Fed's intervention.

Now for the bad news - Retail Sales.

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for December, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $380.9 billion, an increase of 0.6 percent (±0.5%) from the previous month.

That, unfortunately, is an effective zero rate of change.

Folks, the idea that our economy is "recovering" is a red herring. Consumers are not doing any such thing, with the alleged "recovery" being eaten by price increases which are, to a large degree, caused by The Fed.

The numbers are right here. And what's worse is that the 12 month rate of change (6.6%) has been trashed by the PPI - which means we're in big trouble, as the only two places this can come out (the 6.5% change in intermediate goods and 15.5% change in crude goods) are either final sales or margins.

This is either going to produce an economic recession or a profit recession - pick one.

The data has only gotten stronger on this point since approximately August. I fully expect that when it is realized and the piper demands his due, which is almost-certain to be this year, we'll once again hear "nobody could have seen it coming."

Baloney - it's been in the data since the middle of last summer.

Read more here.

[sanityjones]

There is no recovery. People are spending more because everything costs more. YOY averages are out the window at this point as they aren't even good for toilet paper. FED pumping has put the nail in the coffin for the consumer because as commodities prices shoot through the roof there will be no discretionary income to prop up retail sales, housing starts, or anything else that people buy when they are prospering. Food, fuel, and housing are three non-negotiables and other than those categories I cannot fathom any measurable growth apart from continued FED intervention.............which will only make things worse.

[traelin0]

The Price is Wrong Report

[burnsattornincan]

Yes it is. To paraphrase Happy Gilmore, <Looks like the price is wrong, bitch!>

[burnsattornincan]

Just a small observation today. I was at the grocery store earlier and was getting the necessary items to make tacos. One of them as you know is the seasoning powder. The normal good brand here is Old El Paso. About 5 years ago it was 99 cents. Maybe 2-3 years ago it rose to 1.39. Today it was up to 1.59 and this was the budget store in town so I'm sure all the others are the same. So in 5 years we have risen 60% on this product. Like I said, this is just a small example and not completely typical but I think most get the point.

[sanityjones]

Just wait until commodities in general break free from the restraint of government manipulation and are valued according to supply and demand. $1400oz gold is cheap. $3.00/gal gas is cheap. $4.00/gal milk is cheap. A day is coming when much of what we take for granted will not be available at any price which has ever been considered reasonable. People will be begging for price controls and government intervention. Have fun in the FEMA camps when your jealous neighbor turns you in for having food, fuel, and plenty of guns and ammo.

[burnsattornincan]

Have fun in the FEMA camps when your jealous neighbor turns you in for having food, fuel, and plenty of guns and ammo.

The last part is to ensure the first part does not happen.

[❤ mollymouser ❤]

Interesting stories. Thanks for posting.