Breakdown of CPI DATA and Real Earnings, June 2022

It is that time of month, to survey the damage from inflation. The BLS report was released this morning and it was a whopper. (historical releases)

Remember that 8.6%~8.9% forecast? Toast!!!

From the release...

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 percent in June on a seasonally adjusted basis after rising 1.0 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 9.1 percent before seasonal adjustment.

The result looks like this...

I didn't fare much better, with an increase at 8.0% y/y and 1.1% m/m.

The various inflation numbers, from the BLS and others ended up looking like this. The Eurostat is my estimate, based on several months of data collection and attempting to understand their method. Their last data published for the USA was in April. 

With nothing really good on the inflation front, the hourly real earnings were dismal, falling further below the pre-covid February 2020 number.

The weekly real earnings followed the same pattern...

I will attempt a July reading for the CPI-U, as I do expect the month to month to be nearer to "0", than this month's 1.3%. This is mostly due to gasoline prices continuing to fall. This mornings national average was $4.61, and is steadily falling to possibly $4.11 per gallon... based on current future's pricing. This would be pricing back in the good old days, of April's average. 

March was actually higher at $4.22; May at $4.44; June at $4.93. February was at $3.52, for those interested.  However, the end of July will most likely still be in the $4.30 range, with a July average of approximately $4.55. (Barring any disruptions in refinery operation, etc.)

Backing the gasoline's rise out of the index, the CPI-U would have been about 8.4%. So the fall off of gasoline pricing does have a significant impact for this month's projections. Also, the core came in a bit higher than anticipated. 

So, I will project 0.3%~0.5% month to month and a reading of 8.9%~9.1%. I fervently hope I am over shooting, this time. 

Once again, in the too early to project C.O.L.A. category, I am adjusting to 9.4%~9.6%. The past few months have been much hotter, year on year, but we are now entering the normal seasonal slowdown period in certain areas and the rate of inflation "should" start to ease. 

The should start to ease, might be clearer with tomorrow's PPI release. I would hope for softer numbers. Friday's release of the retail sales, might also provide a further hint to "demand destruction". Then there is the role being played by the strong dollar. Without that, WTI crude would be about $115 per dollar. This also is impacting imported goods as well. How much of that "trickles down" to the consumer... is to be seen.

Breakdown of CPI DATA and Real Earnings, May 2022

Last month, I shot my mouth off and predicted the CPI for May would come in between 7.9%~8.2%. That was optimistic, as it came up as 8.58%, rounded to 8.6%.

The BLS report for May... (historical archives)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.0 percent in May on a seasonally adjusted basis after rising 0.3 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.6 percent before seasonal adjustment.

The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors. After declining in April, the energy index rose 3.9 percent over the month with the gasoline index rising 4.1 percent and the other major component indexes also increasing. The food index rose 1.2 percent in May as the food at home index increased 1.4 percent.

My own inflation report continues to see the onslaught of higher prices, and I am not happy😠...

Here is a compilation of various inflation reports for May to date. Note my price index jumped to 7.6%. This is not one of those happy increases. Food continues to bite, as those hoarding supplies are beginning to dwindle.

The BLS also released the May Real Earnings Report.

Real average hourly earnings for all employees decreased 0.6 percent from April to May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.3 percent in average hourly earnings combined with an increase of 1.0 percent in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings decreased 0.7 percent over the month due to the change in real average hourly earnings combined with no change in the average workweek.  

Real average hourly earnings decreased 3.0 percent, seasonally adjusted, from May 2021 to May 2022. The change in real average hourly earnings combined with a decrease of 0.9 percent in the average workweek resulted in a 3.9-percent decrease in real average weekly earnings over this period.

Since February 2020...

Based on real earnings, the workforce is back to February 2020 level. It is hard to imagine any improvement, with current inflation eroding earnings. 

The inflation report was a surprise, as it was above forecasts. However, the forecast was revised upward throughout the month. Obviously the forecasts were not raised fast enough. Don't worry (or maybe worry), the forecasts for June report, due out in July... calls for a range 8.64%~8.91%, at this time. With this past month at 8.58% and it already being near mid June, there is a near 100% chance that June's inflation rate will outpace May. The likely headline in July, will once again harken back to the December 1981 rate of 8.92%. Not much further back, as the November 1981 rate was 9.59%.

The PPI comes out Tuesday and we can see the future of inflation, in my opinion. I will be looking at the various groupings as well. We have the essentials, which fall into the food and shelter category; the things we complain about, but could possibly cut back on; the stuff we would like to have; and the stuff that dreams are made of.

The retail trade report is due out on Wednesday and will indicate something, although not sure of what. Several companies are stating they have an abundance of stuff, that we are no longer purchasing as if the world ends tomorrow. Which seems to indicate something related to the previous paragraph.

Still looking for that glimmer of hope, which might be in the CPI-W. As this is based on 3rd quarter, year over year average, the forecasts are indicating a possible 8.7%~9.0% increase. UNFORTUNATELY, that also indicates some serious inflation yet to come. It should be remembered that C.O.L.A. is based on 3rd quarter average, versus same period of a year earlier. While the CPI-U is the headline, the CPI-W was up 9.3% YoY. Which is odd, as years past had the CPI-U accelerating faster than the CPI-W. 

Hope you have a good weekend!!

Breakdown of CPI DATA and Real Earnings, April 2022

 

The BLS report for April...

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis after rising 1.2 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.3 percent before seasonal adjustment.

From last month...

I can fairly confidently (and sadly) state that April numbers due out in May, will likely be north of 8.0%, such as between 8.0% and 8.5%.

So it was 8.3%, or more accurately... 8.26%. That is nothing to brag about, as it bites hard.  

Here is the chart for various inflation figures...

I am drifting upward from 6.4% annual to 6.7%.

While the headline CPI slipped from 8.5% to 8.3%, my own CPI rose. This is largely due to food prices, as having "hoarded" many items and currently reducing the inventory... more pantry items come into play. Additionally, certain medical costs and supplies have edged up a bit more than previous periods. 

The April Earnings Report from the BLS...

WOW... Since February of 2020, an increase of one penny.

The slide has slowed, at least since last month. But can it continue?

Difficult to see how inflation would slow for May, as I think food prices will continue the upward spiral and energy, which was flat to slightly down in April, appears to be ratcheting up again. Of course, there might be some slowing in other areas, but is so hard to gauge. 

My best guess is 7.9%~8.2% for the May reading which comes out in June.

Now for the really, way too early prediction for C.O.L.A. which is officially announced in October AND is based on average CPI-W 3rd quarter year over year... 6.9%~7.2%. Yeah, I know that is not up to par with current inflation rates, but the big money is betting on inflation really cooling in the 2nd half of the year, which starts in July. Possibly even some demand destruction, so it will be interesting to watch. 

The PPI comes out tomorrow and might provide some indication of tapering.

End of the Month... March 2022 PCE, Advance GDP, and Other Stuff.

With the PCE index report this morning, we can wrap up all the March inflation numbers. Granted, some slight improvement was seen in some areas, but still double digit increases on the upstream models seem to suggest more inflation to the consumer.

As mentioned last month, the core seems to be decelerating and the potential for further decreases appear on the horizon. A lot depends on China's current covid lockdowns and impact on the supply chain.

We also see the personal income and outlays for March. Note the current dollars and chained dollars. Chained dollars are only used in a couple of categories. So thrown in inflation and the numbers aren't exactly rosy.

Yesterday the GDP Advance 2022 1st quarter was released and failed to live up to expectations. Quite a bit was made about Consumers still lifting the economy and the trade gap really stifling the numbers. As for the consumers, the bulk of that lift was in the service sector as the goods sector was flat. The Services was up 1.0% quarter to quarter and the trade gap was down 1.4% quarter to quarter. Outside of those two, everything else was tepid, imo. Although Non-Residential Fixed Investment was 2.2% above previous quarter. 

One quarter does not a recession make, so the numbers could significantly change as more data becomes available. 

Of course, the books are now closing for March, and it is on to April numbers. So, the impact of China's covid shutdown policies will become evident real soon, the "official" impact won't begin to be known until June. 

As for consumer inflation for April, I would tend to believe that energy would be flat from March. Don't be misled, as gasoline appears to be edging up at this writing as well as Natural Gas. Core inflation might be decelerating a bit, but food does not appear to be decelerating. Overall, the CPI should "cool" to near 8.0%. Welcome to the late 70s and early 80s of last century.

The U.S. should once again become a net exporter, for the year, of Petroleum and Petroleum Products over the next few weeks, as the exports have ballooned to nearly a 1-million-barrel net exports on a daily average. That million-barrel daily release from the SPR is slated to begin May 1st.

Oh well, this is "fun" times we live in!

Other Stuff...

It amazes me in this day and age... how utterly devoid of knowledge, we Americans have become. Although I can find numerous instances where we are not alone in knowledge deficit.

A near direct quote "Our politicians are always promising to fund infrastructure, yet here we are in 2022 and they have done nothing", which is greeted with broad agreement. Apparently we must all forget Congress passing a $1.4 Trillion infrastructure bill and the President signing it on November 15, 2021.

Usually during this conversation, someone will mention that Trillion Dollar shovel ready infrastructure bill signed by Obama in 2009... and ask what ever happened to that? It never existed. There was a $787 billion stimulus bill, which included about $98 billion for infrastructure, of which a portion was for shovel ready.

We have become equally adept at ignoring stuff that happens and making up stuff that didn't happen.

There really is no hope, so why bother? Everyone slows down to see a car crash or a train wreck or any number of other such things. 

Breakdown of CPI DATA and Real Earnings, March 2022

 

The BLS report for March...

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.2 percent in March on a seasonally adjusted basis after rising 0.8 percent in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.5 percent before seasonal adjustment.

From last Month...  

The forecast for March is a bit blurry, due to energy prices, but the expectations would be 8.2% ~ 9.1%. I would unhappily lean towards the 8.7% range, just based on the rapid rise of gasoline during this month, although it may be peaking as I type. I would expect the upward trend in food prices to continue. 

With this release comes a variety of other numbers...

I am unhappily at 6.4%...

Like many, my food inflation is creeping up. I am able to stay below the headline number, due to some things I don't do. I don't buy a new car, so that 12.5% inflation does not impact me. I do estimate the replacement of my used car, but I would not purchase a used car outright. So I adjust the difference with a trade in... which oddly sees my trade in value also increasing, albeit not as fast as the used vehicle to be purchased. But still the inflation rate is significantly lower than 35.3%.

I should also mention that health costs have thus far inflated at a much lower rate, which still worries me. Hopefully I don't become sick with worry.

On to earnings report... (REAL means over and above inflation... or sometimes below)

This is the 3rd straight month of declines, with it nearly back to February 2020 levels. (Note, I have not adjusted all the adjustment the BLS has made... so it may be more.)

The 4th consecutive month of declines in weekly wages. 

Going forward, it is getting even harder to forecast inflation, as several variables are at play. It would appear that many consumables are starting to slow, which would indicate a potential for slowing of inflation in that area. But then again, China is in lockdown in so many places that further supply disruptions are possible.

Gasoline costs may abate, but likely due to decreased demand and the aforementioned China slowdown. 

Food is the one area that will continue to see inflation, as all manner of issues are arising. 

I can fairly confidently (and sadly) state that April numbers due out in May, will likely be north of 8.0%, such as between 8.0% and 8.5%. 

EDIT: just hours after writing this, the Chinese are loosening the lockdown and crude and gasoline prices have taken off. We'll see where this leads.

Breakdown of CPI DATA and Real Earnings, February 2022

The BLS Report from February, 

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8 percent in February on a seasonally adjusted basis after rising 0.6 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 7.9 percent before seasonal adjustment.

From Last Month... The forecast for February numbers, due out in March are 7.59%~7.9%. So it was on the upper end. Remember this is inflation for the month of February.

With this release comes a variety of other numbers...

I am at a 5.9% annual rate...

This rise was largely attributable to food at home, which on the BLS report, outpaced the overall inflation rate at 8.6%

The forecast for March is a bit blurry, due to energy prices, but the expectations would be 8.2% ~ 9.1%. I would unhappily lean towards the 8.7% range, just based on the rapid rise of gasoline during this month, although it may be peaking as I type. I would expect the upward trend in food prices to continue. 

Of course it is all speculation, as we are not at mid month, but I feel it is safe to say that prices will not recede.

On to the earnings report...

This was a disappointment, with an -11¢ per hour decline. Maybe weekly earnings improved...

NO. For the 3rd straight month real weekly earnings declined. Remember all the data thus far is for February.

Going forward, we must remember the 8.0% number, as that rate of inflation is largely without the impact of the Russia-Ukraine war. The impact of the war on energy and food costs is yet to come. We must also remember that weather impacts food costs and with spring around the corner and the thought of summer vacations on the horizon... energy costs will likely rise as inventories of petroleum products are at or below the 5 year range. 

Earlier I mentioned the expectations of inflation rates for our current month, due out in the 2nd week of April. Going forward into April potential expectations, the inflation rate for a month to month increase is staggering (think June 2008 or 9-2005's Katrina or 1-1990 Gulf War) as well as the double digit year to year (Oct-1981). 

I suspect the economy will begin to cool at about this time and the longer range inflation forecasts indicate as much. Tuesday will bring the PPI report out and some indication of pricing going forward might be seen. It will be followed the next day with retail sales, which should be interesting. A lot of revisions, etc. last month under the guise of "usual annual" stuff, so it will be interesting to see the spin on that report.

Buckle up, the peak is still a ways off, imo.

MY MUDDLED THOUGHTS AND ATTEMPTS TO MAKE SENSE OF IT ALL

Normally I write about Inflation and "business" outlook, etc. Recent events have muddled my thoughts and it is hard to make sense of what might happen... so here goes, while acknowledging recent events potential impact.

Inflation 

The BLS CPI report is slated for release on March 10th. THIS REPORT IS FOR FEBRUARY, so would have limited impact from the invasion. The range is 7.6% ~ 7.9%, with the upper end more likely. Pre Invasion expectations for March CPI, being released in April... to be even higher. 

It is those expectations that are going to be heavily impacted by the Ukraine Invasion.

Food

The potential disruption of basic food commodities, have driven multiple items to either all time highs or nearing those all time highs. Wheat, Corn, Barley, Canola, Rice, etc. etc. 

Grains are going up, so what about meats? There is a mixed message compared to a couple of months back, with the likelihood of staying flat. However, while chicken prices are moderating, there are worries about bird flu, etc. 

The CPI has food as about 14% of the average household expense. It should come as no surprise that the above average income households spend less that 14% and below average income households, will spend more that 14%. 

It is about 50/50 of that 14% going to food away from home and food at home. I have no data as to how that breaks out for above and below average income households, so will refrain from positing a guess. I would think the food index will rise month to month and add onto the inflation pressures. 

Energy

While energy makes up only about 8% of the CPI index compared to food's 14%, guess which will get all the media attention! That most of the current significant rises are in the past few days, the March 10th report is considering just the month of February.

I have no doubt the national average for gasoline will reach all time highs and possibly reach $4.5 @ gallon. The previous was in July, 2008 at either $4.11 or $4.17, depending on data source. This level, with everything else staying flat, would push March inflation to 8.5% y/y. For reference, this is in the range of  Jan48 ~ Aug48 preceding a recession; Feb51 ~ Jun 51 Korean War; Dec73 ~ Aug75 Oil embargo resulting in recession and Oct78 ~ Dec81, which straddled two recessions and the Iran Revolution.

I guess I am saying that nothing gets Americans more antsy... than the price of gasoline. Not even...

Ukraine

Certainly I am concerned about the innocent lives being taken and the disruptions to others. It is not lost on me that not a lot will be done, other than taking in refugees, etc. I recall reading where it has become popular in Ukrainian circles to wonder how many more buildings are left in the west, to be lit up with Ukrainian colors. Apparently, they realize this is about the extent of their support. Is that what is called "virtue signaling?"

Here in the USA on social media, it seems the discussion is about all the things we should've, could've or would've done to prevent this. I am not sure how this could have been avoided, short of keeping the U.S.S.R. intact. A right that wasn't ours to make. 

Sure, we might have rejected those former members of the Warsaw Pact from joining NATO, but why? And why did they ask to join NATO? I don't recall NATO countries sending in tanks and overrunning those countries and forcing them to join NATO.

Sadly, we can now see the answer to these questions. Horrifying as it might seem, Russia will eventually pound Ukraine into submission. Then some rebel enclave (Russian) in Moldavia will need to have Russian "peacekeepers", so who will be next?

A couple of other questions might be... Is Putin really that strong? Or are we just that weak? Frankly, the lack of resolve by western countries can be pinned on a very divided public. It should also be pointed out that while a large number of countries voted to condemn the invasion and a very few rejected the U.N. condemnation... the abstentions were by countries with nearly 1/2 of the global population. We in the west need to toughen up or the future will be grim, imo.

Putin

It is not uncommon for idiots such as myself to make stupid statements. To have national leaders uttering such statements is borderline insane. 

Uttering that someone in Putin's inner circle should take him out, is something idiots like me would say. I would suspect that Putin's inner circle are not nice people and have their own vested interests, which might include assuming Putin's leadership position at some point... once their own vested interests are in place and could safely assume that role. In other words, someone that is whispering in Putin's ear and Putin considers as being faithful to him. Possibly even a more sinister version of Putin.

I am reminded of Fidel Castro. Fidel Castro came to power by ousting Fulgencio Batista, a person which was reviled by the US. Castro was treated with open arms, appearing on American Television as some kind of conquering hero... until he quickly lost that mantle and became the most hated by the same groups. It did not take long and led to assassination attempts, severing of diplomatic ties, The Bay of Pigs and finally leading to the Cuban Missile Crisis.

Be damn careful of what you wish.

Summation

I suspect the Ukraine invasion will shortly be displaced on American television as inflation and economic worries become more prominent. As for inflation, the polls seem to indicate that 50% of the American public blames Biden and 25% blame Putin. Which may explain the Administration's reluctance to sever Russian Imports and the Republicans are keen on doing just that. Politics is always in play.

I frequent various European news editions and this will likely be the same, and they have a much bigger dependence on Russia's energy. 

How we got in this shape can and should be discussed, but afterwards we must acknowledge... WE ARE IN THIS SHAPE! What are we DO about it and not just talk about it?

Breakdown of CPI DATA and Real Earnings, January 2022

 

The BLS report for January, Indicated a 7.5% yoy inflation rate with the month on month being 0.8% unadjusted or 0.6% after adjustments.

With this release comes a variety of other numbers...

I am at the 5.7% annual rate...

Not as bad as the overall, but nothing to be joyful about. Food was up, but the biggest portion was attributable to medical costs. Much of that was beginning of the year co-pays and deductibles. Hopefully, the following months will recede to rather low levels of medical inflation... compared to year's past. 

I had previously forecast January to fall between 7.04% ~ 7.40%. That 7.5% was a bit of a shock and now brings the 7.62% rate in February 1982 into play. The current forecast for February numbers, due out in March are 7.59%~7.9%, 7.74% as median. 

On to the earnings report.

The hourly real earnings (earnings after inflation adjustment) edged up 1¢. This would seem to indicate that earnings are at least keeping up with inflation. However...

Real weekly earnings slipped, due to a decrease in hours worked. This is the 2nd straight month and is not reassuring, imo.

As for the CPI forecast, more will be clear on Tuesday, with the PPI release. Let's keep our fingers crossed. 

Breakdown of CPI DATA and Real Earnings, December, 2021

 

The BLS report for December, Indicated a 7.0% yoy inflation rate with the month on month being 0.3% unadjusted of 0.5% after adjustments.

With this release comes a variety of other numbers...

I am at the 5.0% annual rate...

I had a better than expected outlook for my personal rate of inflation, but this continues to be due to medical costs rising at a much slower rate than everything else, AND at a slower rate than in recent years. I just cannot be so optimistic as to call this a long term trend.

I had previously forecast...December is likely to be between that 6.98% and 7.16%.

The likelihood of January's numbers falling between 7.04% and 7.40% are fairly high at this point. While there was joy in the easing of energy prices, not sure the rough patch of weather in the next 2 weeks will not negate some of that joy. For comparison... June 1982 was 7.06% and then February 1982 was 7.62% and January 1982 at 8.39%. I throw that out as we heard highest inflation in nearly 40 years for last month and again for this month. Also, for the record, that 7.62% (2-1982) was the lowest rate since June of 1978.  

Also, beef prices are easing a bit, but Covid may mess up the work force in that category. In any case, the month to month changes will be the real guide going forward, as YOY increases might start to ease. Not that inflation is easing, but January 2021 saw inflation percolating and then lifting off in February. 

Historically, the June 1982 YOY inflation was pegged at 7.06%, compared to last months 7.04%. From there it is February 1982's 7.62%. Next month's headline will be highest inflation in nearly 40 years.

On to Real Earnings...

Basically the report indicates wages are keeping up with inflation on month to month, but still below the recent peak of September.

Breakdown of CPI DATA and Real Earnings, November, 2021

 

The BLS report for November, indicated a 6.8% increase from year ago and 0.5% from previous month. 

A variety of other data releases indicated many different inflation numbers...

Of course, mine is also included at 4.7%...

Going forward, the expectation is for December's numbers to rise another 0.4% for the month, or 6.98% over the past 12 months. Meaning December is likely to be between that 6.98% and 7.16%. This month's number were last seen in June 1982, when it was 7.1%. I should point out the inflation rate was falling at that time, from a high of 14.8% in March of 1980. Good times!!!

There weren't many surprises in this report, and it was near expectations... so December expectations might be on target as well or possibly above, as the misses of late, have been on the underside. 

Real Earnings were also released...

The hourly real rate slipped a bit and is now back to March 2020 levels.

Despite the real hourly rate being near March 2020, real weekly earnings are still a few dollars above. 

CPI for October, 2021

Holy Toledo!!! And other places as well. The CPI-U came in at a staggering 6.2% YOY, well above anybody's expectations. Although given yesterday's PPI, the expectations should have been revised upward. 

There were no hints of slowdown in nearly any category, with maybe the medical category, which has been rather benign over the past 12 months. I cannot accept that as being a long term trend, no matter how much I wish it were true. 

Even my own personal household cpi rate, woke me up. While not in the same impact as the CPI-U, it was 

4.16%, with the monthly increase similar to the CPI-U.

Realistically, my being under the CPI-U is largely due to hoarding prior to the referenced timeframe and subsequent easing of quantities. Seriously, there are only so many cans of pork and beans that a person can eat in a lifetime. (Unlike the annual revision of various weighting of items, I revise monthly.)

The Real Earnings report was also released. While it is oft cited that wage increases are inflationary, it should be pointed out that current wage increases are a result of previous inflation.

Real Hourly earnings based in 1982~1984 dollars, fell this past month, as did a dip in hours worked, which translates into even steeper weekly earnings drop. 

With both Producer prices at the final and intermediate demand levels still rising, it is hard to foresee any glimpse of peaking anytime soon. Then there is the importation of inflation. We are a net importer and inflation is ramping up among our trading partners. 

Most notably would be China, where producer price inflation is north of 10%, but where the Government is forcing producers to hold the line to keep Chinese consumers in the 1% inflation range. 

How could these companies survive in such a climate? Cranking up prices well beyond 10% for foreign customers.  Some of that is likely a part of the intermediate demand increases, which are not tapering at this time. 

The forecast for November is 6.6%~6.9%. October was 6.2% compared to a 5.7%~5.9% expectation. For the record, 6.6% would be the highest since June, 1982.

Then there is some theoretical relief from the Federal Reserve, with an interest rate increase to slow inflation. The FED looks that the CORE inflation and not the core CPI-U from the BLS, but rather the Core of the PCE, from the BEA. 

The FED has frequently cited the need to establish this Core at 2%... over a period of time. Not real sure what the timeline would be, but the past 5 years has shown a 2.11% annual rise. Yet the thinking is the FED action will not happen until next summer. 

The problem is the FED is stuck between a rock and a hard place. When that theoretical raise occurs, the capital/financial markets could be damaged. 

In my opinion, the FED keeps talking up transitory, while hoping the consumer finally capitulates on spending due... to inflation. They can then claim they were right all along.

It is so difficult to remain optimistic.