### Summary
Former Toys "R" Us CEO Gerald Storch warned that the economy is likely to face a difficult holiday season due to persistent inflation. Other economic stresses such as rising interest rates, credit card debt, and student loans are also contributing to consumer difficulties.
### Facts
- Inflation remains sticky despite the Inflation Reduction Act that was passed a year ago.
- Sales of physical products have been declining for 11 consecutive months when adjusted for inflation.
- The July consumer price index (CPI) rose 0.2%, with prices climbing 3.2% from the same time last year.
- Pulte Capital CEO Bill Pulte suggests that the economy is in a period of stagflation with low growth and high inflation.
- Shelter costs, accounting for 40% of the core inflation increase, rose 0.4% for the month and are up 7.7% over the past year.
- Americans are spending $709 more per month on everyday goods and services compared to two years ago.
- Consumers are shifting towards value retailers in response to inflation.
- President Biden acknowledges that the Inflation Reduction Act was not solely aimed at reducing inflation but rather focused on generating economic growth.
### Summary
The UK economy is facing inflationary pressures as measures of underlying inflation remain high, leading to expectations of further interest rate rises. However, different sectors of the economy are experiencing mixed fortunes, with some industries booming while others face challenges. The cost of living crisis is far from over, with food price inflation still expected to remain high.
### Facts
- Measures of underlying inflation, such as core inflation, remain stuck at a high rate even as headline inflation falls.
- Services inflation has increased to a joint 31-year high.
- Two-year and ten-year gilt yields have risen to their highest levels since the 2008 financial crisis, indicating market concerns about inflation.
- Some sectors, such as travel firms, hotels, and restaurants, are booming due to increased consumer spending on leisure, while others, like construction firms, are facing challenges due to rising costs.
- Food price inflation is expected to remain in double digits for the rest of the year, contributing to ongoing cost of living pressures.
- Higher interest rates may be necessary to temper economic demand and align it with the reduced supply potential of the economy caused by factors such as fewer workers, trade barriers, and reduced investment.
- Rising interest rates could potentially hamper efforts to improve the economy's productivity.
- The housing market is experiencing a holding pattern, with longer mortgage terms being offered to manage rising interest rates.
- Bank of England governor Andrew Bailey does not consider the housing market situation a "correction" or crisis.
### emoji 📈💼💸🔒🔺💰
- Inflationary pressures persist in the UK economy.
- Different sectors of the economy are experiencing mixed fortunes.
- Food price inflation remains high, contributing to ongoing cost of living pressures.
- Interest rates are expected to rise further due to inflation concerns.
- The housing market is in a holding pattern with longer mortgage terms being offered.
- Market conditions and economic recovery remain uncertain.
### Summary
Inflation rates would be significantly lower if the "owner equivalent rent" component was removed from the consumer price index, according to an opinion piece.
### Facts
- Removing the "owner equivalent rent" (OER) component from the consumer price index (CPI) would result in a lower year-over-year inflation rate of about 1.5%, compared to the current rate of 3.2%.
- The personal-consumption expenditures price index (PCE) would also see a decline in the inflation rate, from 3% to approximately 2.2%.
- The author suggests that the inclusion of OER in these indexes causes inflation to be overstated.
- These findings indicate that inflation has fallen more than what current flawed price indexes suggest.
Removing the fictional "owner equivalent rent" (OER) from price indexes reveals that inflation has decreased more than reported, with the year-over-year inflation rate falling from 3.2% to 1.5% and the personal-consumption expenditures price index declining from 3% to 2.2%.
Inflation is causing a decline in affordability for average working individuals, with prices on everyday necessities such as groceries, gasoline, and housing rising significantly in the past two years due to government spending and the Fed's money-printing.
The Federal Reserve's primary inflation rate showed a decrease in core price pressures in July, but Fed Chair Jerome Powell is now focusing on price changes for services excluding housing and energy, which surged last month, potentially contributing to the gains in the stock market.
Consumer prices in the eurozone rose 5.3% on average this month compared to last year, with core inflation easing to 5.3%, potentially increasing pressure on the European Central Bank to raise interest rates.
Consumer prices in the US rose 0.2% from the previous month, and 3.3% annually, indicating persistent high inflation and posing a challenge to the Federal Reserve's efforts to curb it; core prices, which exclude food and energy, also increased 0.2% from the previous month and 4.2% from the previous year.
The two different inflation measures in Ireland, the Consumer Price Index (CPI) and the harmonized index of consumer prices (HICP), have started to diverge, with the HICP falling quicker than the CPI due to mortgage interest costs being included in the latter, revealing a crucial shift in the inflation dynamic as mortgage interest costs have overtaken energy prices as the main driver of inflation. Additionally, the increasing number of fixed-rate mortgage customers facing higher interest rates could keep inflation higher for longer, along with other factors such as higher food prices and ongoing rental market pressures.
The Federal Reserve may be the cause of rising housing prices and the low supply of existing homes, which could lead to increased inflation and concerns about the Fed's response to the cost of living. Lowering interest rates and unlocking the supply of homes could help alleviate the issue.
Inflation has decreased significantly in recent months, but the role of the Federal Reserve in this decline is questionable as there is little evidence to suggest that higher interest rates led to lower prices and curtailed demand or employment. Other factors such as falling energy prices and the healing of disrupted supply chains appear to have had a larger impact on slowing inflation.
The article discusses how the rate of inflation has impacted processors, distributors, and other middlemen, with some benefiting from price increases but now at risk of a slowdown.
Investors and the Federal Reserve will have to wait for inflation to return to acceptable levels, as the Consumer Price Index report for August 2023 shows consumer prices rising at half the pace compared to a year ago, despite a jump in gas prices.
Americans' overall views on inflation remained unchanged in August, despite predictions of rising prices for rent, homes, and food, and a downgrade in their personal financial situations, according to the New York Fed's Consumer Sentiment Survey.
The Consumer Price Index is expected to show an increase in inflation in August, with headline inflation rising to 3.6% and core inflation easing to 4.4%, but the market is accustomed to this trend and the Federal Reserve is unlikely to change its rates at the upcoming meeting.
The United States is experiencing inflationary pressures due to rising home prices and rental costs, posing challenges for homebuyers and renters, and potentially leading to broader increases in related services and inflation in other categories. Fed regulators are expecting deflationary trends in the future, but the interaction between housing data and the broader economy is crucial. The imbalance between supply and demand in the housing market needs to be addressed for prices to stabilize.
Goldman Sachs predicts that the August consumer price index (CPI) will show a 3.58% annual increase, with a decline in used car prices, higher airfares and transportation prices, and stable shelter inflation.
The latest inflation report is expected to show a steady increase in consumer prices, with economists predicting a 3.6% overall inflation compared to last year, indicating that inflation is gradually coming down but still remains above the Federal Reserve's target.
U.S. consumer prices are expected to have increased the most in 14 months in August due to rising gasoline costs, while underlying inflation is forecasted to remain moderate, potentially prompting the Federal Reserve to keep interest rates steady.
Despite a spike in gas prices, the rise in inflation appears to be easing gradually, with core prices exhibiting a slower increase in August compared to July, suggesting that price pressures are being brought under control.
Gas and housing prices continue to rise, leading to a 0.6% increase in the federal consumer price index for August and a 3.7% increase for the year, causing concerns about overall inflation and its impact on household budgets.
Despite claims by the Biden administration and corporate media that inflation is decreasing, the latest consumer price index from the Bureau of Labor Statistics shows that Americans paid 3.7 percent more for basic consumer items in August compared to the previous year.
Inflation in the US accelerated for the second consecutive month in August due to rising costs of rent and gasoline, with the consumer price index rising 0.6% from the previous month and 3.7% from the same time last year.
Despite elevated inflation, the Federal Reserve is not expected to lower interest rates soon, causing the Consumer Price Index to rise significantly and impacting mortgage rates and home prices.
"Inflation expectations can influence actual inflation, as people's behavior and attitudes towards the economy play a role in price changes," according to Joanne Hsu, director of the Surveys of Consumers at the University of Michigan.
The recent decline in inflation and potential end to interest rate hikes may not solve systemic problems in the housing market, as rising energy prices and high mortgage rates continue to squeeze the market and push house prices down.
Despite expectations of higher interest rates causing a spike in unemployment and a recession, the Federal Reserve's rate hikes have managed to slow inflation without dire consequences, thanks to factors such as replenished supplies, changes in the job market, and continued consumer and business spending.
Australian consumer inflation grew as expected in August, driven by surging energy and housing costs, raising speculation that the Reserve Bank may need to further increase interest rates.
The Federal Reserve's preferred inflation indicator, the personal consumption expenditures price index excluding food and energy, rose less than expected in August, suggesting progress in the central bank's fight against higher prices.
Consumer spending in the US increased by 0.4% in August, while core inflation fell below 4.0% for the first time in over two years, potentially reducing the likelihood of an interest rate hike by the Federal Reserve.
Wage-sensitive inflation in non-housing services has been easing, while wage-insensitive inflation remains volatile and difficult to interpret, according to the Council of Economic Advisers (CEA). Housing inflation continues to be a significant contributor to excess inflation, but it is expected to gradually fall in the coming months.
Higher gas prices drove an increase in an inflation gauge tracked by the Federal Reserve in August, but measures of underlying inflation slowed, suggesting overall price pressures are moderating and raising the likelihood that the Fed will leave interest rates unchanged in its next meeting; however, the combination of higher gas prices and sluggish income growth may weaken consumer spending and mark a slowdown from last summer's healthy pace of spending.
Inflation is impacting Americans across the country, with the Miami-Fort Lauderdale-West Palm Beach metro area experiencing the highest increase in consumer prices at 7.8%, followed by Denver, Atlanta, Seattle, and Detroit, according to WalletHub. Housing prices are a major driver of high inflation in cities like Miami, and while experts anticipate a gradual cool-down of prices, patience is needed.
Consumers perceive inflation as much higher than official figures indicate at the moment, largely due to sharp increases in the price of things like restaurant dining, hotel accommodation, and gasoline.
Investors in the week ahead will focus on the release of the Consumer Price Index (CPI) for September, third quarter earnings reports from companies like Pepsi, Delta, and JPMorgan, and insights from the Federal Reserve's September meeting minutes.
The Reserve Bank of India (RBI) expects consumer price index (CPI) inflation to ease below 4 percent in fiscal 2024-25 if there are no further shocks and a normal monsoon, with the central bank rethinking rate cuts only if CPI inflation remains at or below 4 percent on a durable basis.
The September CPI report is expected to show that inflation remains above the Fed's target, increasing the likelihood of a rate hike and raising inflation expectations for 2023, potentially leading to further upside risk to rates from Treasury auctions.
The upcoming Consumer Price Index (CPI) report for September is expected to show cooling core inflation despite a rise in headline inflation, with the Federal Reserve closely monitoring the data to assess whether inflation is moving closer to its 2% annual goal.
The Consumer Price Index (CPI) report for September 2023 is expected to show a slow increase in prices, with market expectations forecasting a 0.3% increase in core inflation on a monthly basis and 4.1% on a yearly basis, which may lead to stronger market reactions if the figures exceed expectations. Banks such as Morgan Stanley, Goldman Sachs, and Bank of America have provided their predictions for the upcoming CPI report. Analysts suggest that if the core CPI exceeds 0.1% on a monthly basis, it could lead to a decline in the stock market as it may indicate a potential interest rate hike by the Federal Reserve. This data is particularly significant as it precedes the FOMC meeting scheduled for October 31-November 1.
The rapid decline of US inflation may not last due to potential upside risks in categories like used cars and airfares, raising concerns about whether price pressures in services components such as housing can slow down enough to sustain the downward trend.
The U.S. government's upcoming inflation report is expected to show a cooling off of inflation, with overall prices for consumers rising by 0.2% compared to August and 3.6% compared to a year ago, and core inflation expected to be up 4.1% from September last year, indicating slower price increases in September than in August.
The upcoming monthly inflation report is expected to show that inflation in the US is cooling off, with overall prices for consumers rising by 0.2% compared to August and 3.6% compared to a year ago, indicating slower price increases in September than in August. However, if the report reveals that inflation remained higher than expected, especially in core areas, it may prompt the Federal Reserve to raise interest rates again, further slowing the economy.
The Consumer Price Index (CPI) rose higher than expected in September, causing the price of bitcoin to decline, as the Federal Reserve hinted at the possibility of another rate hike.
The Consumer Price Index rose 3.7% for the 12 months ended in September, with high gas prices and shelter costs contributing to inflation, although food prices matched overall inflation for the first time since early 2022, and underlying inflation trends are moving in the desired direction of the Federal Reserve.
U.S. consumer prices rose in September due to surging rental costs, but underlying inflation pressures remained moderate, suggesting that the Federal Reserve is unlikely to raise interest rates next month.
The Consumer Price Index (CPI) report for September 2023 shows that while core goods experienced deflation, core services, particularly housing, continued to rise, indicating mixed results for the U.S. economy and leaving the Federal Reserve cautious about any policy changes.
