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.

Do Politicians Really Lie??

(Pulled this out of the old dustbin).

I suspect that current day politicians aren't the prolific liars of the days of yore. Bear with me a minute.

In days of yore, politicians heaped praise on themselves and lauded themselves on the wonderful jobs they have done and the great things they will accomplish in the future. A lot of lying took place.

In our current environment, politicians still do those things, but the real meat is in attacking the opponent with smears, etc. Unfortunately, most of these attacks on the character of their opponents are quite likely true.

Granted it is only my opinion, but based on that last paragraph... I consider today's politicians more honest than those of the past.

That is NOT to be construed as politicians of today being more honest, trustworthy, or ethical. Quite the opposite.

All the odds are on the man who is, intrinsically, the most devious and mediocre — the man who can most adeptly disperse the notion that his mind is a virtual vacuum. 

The Presidency tends, year by year, to go to such men. As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. 

On some great and glorious day, the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron. - H.L Mencken ?1920?

That was from nearly 100 years ago and while some people might look at some of the recent elections and nod their heads in agreement... it should be noted that most of Mencken's quote are very past tense.

Politicians have become more adept at avoiding the truth, massaging the truth and spinning the truth.

Just sayin...

Funny, Strange, ODD, and Disinformation!

Where France's Macron buys his suits is front page news on one of the many international news websites I peruse. 

Germany's Chancellor has done another about face, which has left the columnists spinning, trying to keep up.

Europe is cooperating on gas, which suggests some sort of united front, but really ends up with several countries in Europe not cooperating and even one stating they will veto. I got to look up "cooperating", in the dictionary. Hungary claims there are 10 countries using the Rubles for Energy scheme.

Previously, Germany got the blame for obstinance regarding sanctions, but any meaningful sanctions have seen the EU bloc in disarray. Conveniently, the Germans are now pushing back by laying blame on "other" members of the EU. No doubt they will eventually coalesce their blame shifting and lay all this at the feet of Americans. Some things never change. 

Pelosi has been to Ukraine and is seen posing with Zelensky. Is it one of those selfies Zelensky was so critical of?

India is on pace to have a record wheat crop. Oh wait, India is undergoing a massive heat wave which may dramatically limit the wheat crop. 

Musk buys twitter and Homeland Security announces, "Disinformation Governance Board". DGB... not to be confused with KGB, which was a completely different committee. What qualifies as disinformation, misinformation, etc.? Who decides when a lie is no longer a lie, or when the truth is no longer the truth?

Speaking of disinformation... CNN is boldly proclaiming "3 Signs that Prices Could Soon Come Down." Prices coming down would be a sign of "deflation". The rate of inflation might come down, but prices... not so much. But it is CNN, so excuse the confusion or is this what the KGB DGB will soon remedy? Not intentionally leaving out FOX, MSNBC, et al, but it is way too much.

I keep reading where China's economy may be stalling, but until China says it is... it isn't. I fully expect them to say they are meeting targets. <wink> <wink>

A lot of concern about U.S. farmers cutting back on fertilizer and the potential for much lower crop yields as a result. The big farmers bought their fertilizers and inputs and had it all delivered by December 31st. Granted the big farmers does not equate to all farmers, but the weather is still the biggest factor. That weather has not been very cooperative at the start of this planting season.

This nugget from a Deutsche Welle opinion piece, regarding North Korea...

Pyongyang claims the most advanced weapon in its armory can carry multiple warheads and has a range of more than 15,000 kilometers (9,300 miles), putting the entire continental US within striking distance.  

Note that the continental US is singled out. That distance puts all of Asia, Europe, Oceania, the North American Continent, most of Antarctica, most of Africa, and South America above the equator. It would not be difficult to understand the continental U.S. would be the main objective, but the wording seems to indicate only the U.S., while ignoring fallout, etc. 

Run out of things to ponder, so time to wrap this up. 

NATO and the Western Alliance

 

Where to start? I really don't know and at times this might seem like a rant, so bear with me. 

We are being told that the NATO alliance has never been stronger but is that true. There is a lot of posturing in favor of NATO, but what are the real opinions of Europeans, Canadians, and Americans.

In 2019, PEW research published the results of their survey titled "NATO Seen Favorably Across Member States," with the subheading of "Many in member countries express reservations about fulfilling Article 5’s collective defense obligations."

Maybe I am misinterpreting the results, but it would seem that much of the public is opposed to their own military engaging on behalf of another member. I suspect this is due to the one- and only-time article V was invoked. It becomes difficult to determine the thought processes of those giving their opinions.

At that time, I would have suspected they meant if the U.S. was again attacked, but recent events suggest if any NATO member was attacked. The PEW Research addressed this in 2019 with the question... 

The expectation is for the U.S. to carry the load. This idea is firmly planted, in my opinion. Certainly, polls taken today might suggest something else, but is the respondent simply saying what is a safe answer?

The problem with all of this, is the U.S. might be able to do the heavy lifting, but at what cost and who bears the brunt of the criticism for any collateral damage. Collateral damage would include such things as economic turmoil, due to energy supply curtailment. Pause and think about that.

I have no doubt that European Citizens would blame the U.S. as it seems to be their historical go to when anything bad happens ... and unfortunately sometimes it is correct (rarely taking responsibility for their own mistakes). It would likely lead to the collapse of NATO. There would likely be a hue and cry over what the U.S. had wrought and lead the Americans to turn very negative towards NATO... to the point of opting out. Not that far away, in my humble opinion. A great many Americans are already questioning NATO's value.

Therefore, the U.S. must walk a razor thin line between supporting Ukraine and avoiding Russia cutting off energy supplies. 

Like a lot of folks, I originally thought Russia just wanted Ukraine, but I suspect the main objective is dissolution of NATO and severing U.S. ties with Europe. 

I realize this might seem far-fetched, but given the attitudes of various countries, towards the United States, ...it moves the needle towards that real possibility.

Unfortunately, there is a much bigger picture at play... which would be the Western Alliance, which in this case would also include some countries in the Pacific. In that regard, I am referring to a way of life we have become accustomed to.

Indecisive action is leaving the door open to further divisions and giving the enemies to our way of life, an opening to seize upon.

No, this was not a positive and uplifting blog article. I am old and won't likely see the end of all this, but I have children and grandchildren for which I worry. 

Hurrah! I Am Once Again a Troll!

I think I was just called a troll. Not to go into detail, but one of the social anti-social websites I frequent, had a new thread on a topic that has in the past created substantial disagreement. The OP was clearly coming out on one side and clearly stated everyone with a differing opinion should have their comments blocked and/or threads blocked.

Being the first to arrive on the scene I suggested to the OP that “IF’ they were looking for attention, they had hit the jackpot”.

The response from the OP was priceless, in my opinion. I even voted it a very happy smiley face and did not respond.

Which must have further provoked this individual, as they started going on about how important they were in their past life. Apparently, I was supposed to give a darn, although I saw nothing that impressed me. 

Therefore, I once again voted it a very happy face and refused to respond. As I had only asked “if’ they were seeking attention”, I must have struck close to home. As for attention, the OP got attention and not always in a nice way.

But I have once again been called a Troll and once again I am very proud of the honor. It has truly been a good day. 👍

My Life As a Useful Idiot

 

nadiathemis.com

I can summarize my working life as nothing more than being a useful idiot. Being retired means I am no longer useful, which just leaves being an idiot... so you are forewarned about anything I say or do. 

If you are not on top of the pile, you are likely someone's useful idiot. Along the way, you rationalize the changes you have made in your values... just to get ahead. 

At one point in my life, I was informed my clothing was THE reason I got a raise at the lower end of the spectrum. After a year of buying fashionable clothing and looking stellar all the time... I got a raise at the upper end of the spectrum. The dollar difference did not make up for the pricier clothing.

But as Shakespeare said, "The apparel oft proclaims the man," except Shakespeare was a playwright and he was writing the dialogue of Polonius. Simply put... books are generally judged by their cover. Polonius also stated, "To thine own self be true." Take care of yourself and your affairs above all else", was the intended meaning. 

Most people take the above quite literally and dress for success, while climbing the ladder at the expense of others. Office politics takes control over individual values. Your version of right v wrong, gets distorted on the way up the ladder.

While I got off the ladder by retiring, I do see how some people might get angry when they are thrown off the ladder. They would rationalize this occurrence by shifting blame to those remaining on the ladder. The truth is in their own failure to adjust to the politics of the ladder... or being a valued useful idiot. 

It is likely that none of this makes sense, but I would suggest some soul searching about how you own values have changed over the years... and why.

Good Luck!!

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.