This week is a biggie on the inflation front, with import price data out this morning
and the Consumer Price Index coming tomorrow. So what did the April numbers show? That import inflation is simply out of control. Consider:
* Import prices jumped 1.8% on the month, bigger than the
1.6% increase that economists were expecting. More importantly, the year-over-year rate of import inflation is up to a whopping 15.4% (vs. 14.9% in March).
1.6% increase that economists were expecting. More importantly, the year-over-year rate of import inflation is up to a whopping 15.4% (vs. 14.9% in March).
* What about the details?
Ex-petroleum import prices were up 1.1% on the month, and up 6.2% YOY. That’s the fastest rise since 1988. Even if you strip out all fuels, you get a 1%
monthly rise and a 5.8% YOY
increase.
Ex-petroleum import prices were up 1.1% on the month, and up 6.2% YOY. That’s the fastest rise since 1988. Even if you strip out all fuels, you get a 1%
monthly rise and a 5.8% YOY
increase.
* Food and
beverage prices were up 0.4% on the month (12.6% YOY),
industrial supply prices rose 3.9% (37.3% YOY!), capital
goods prices were up 0.8% (2.1% YOY), and consumer goods
prices gained 0.2% (2.8% YOY). As you know, I have also
been watching the price of imports from China. They
increased once again — though the monthly gain moderated to 0.2% from 0.6% in March. Chinese imports are up 4.1% in
price from a year ago.
beverage prices were up 0.4% on the month (12.6% YOY),
industrial supply prices rose 3.9% (37.3% YOY!), capital
goods prices were up 0.8% (2.1% YOY), and consumer goods
prices gained 0.2% (2.8% YOY). As you know, I have also
been watching the price of imports from China. They
increased once again — though the monthly gain moderated to 0.2% from 0.6% in March. Chinese imports are up 4.1% in
price from a year ago.
Another key piece of data: The retail sales report from April was
in line with expectations — down 0.2%. But if you strip out autos, you get a 0.5% rise, better than the 0.2% increase
economists were expecting.
in line with expectations — down 0.2%. But if you strip out autos, you get a 0.5% rise, better than the 0.2% increase
economists were expecting.
Look, I’m sorry if this sounds hyperbolic, but these inflation rates are
out of control. Out of control. We are talking about a year-over-year import inflation
rate of more than 15% — the most ever (figures go back to 1982). In
his satellite-delivered
remarks to the Federal Reserve Bank of Atlanta Financial
Markets Conference in Sea Island, Georgia today, Fed Chairman Ben Bernanke focused exclusively on conditions in financial markets, and the Fed’s efforts to
boost liquidity. But somebody at the Fed better step up and start sounding the inflation alarm.
out of control. Out of control. We are talking about a year-over-year import inflation
rate of more than 15% — the most ever (figures go back to 1982). In
his satellite-delivered
remarks to the Federal Reserve Bank of Atlanta Financial
Markets Conference in Sea Island, Georgia today, Fed Chairman Ben Bernanke focused exclusively on conditions in financial markets, and the Fed’s efforts to
boost liquidity. But somebody at the Fed better step up and start sounding the inflation alarm.
Bond traders aren’t waiting
around, by the way. They’re selling — long bond futures were recently down 19/32 in price. The yield on the 2-year
Treasury Note has surged 12 basis points to 2.42%.
around, by the way. They’re selling — long bond futures were recently down 19/32 in price. The yield on the 2-year
Treasury Note has surged 12 basis points to 2.42%.
More on this topic
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2009 and 2010 Federal Income Tax Bracket Tables and Standard Deduction Changes
(Saving to Invest, 9/22/09)
5 Steps to Take Now in Preparation for Double Digit Inflation
(Saving to Invest, 7/5/09)
The Perfect Investment Storm for Retirees
(Canadian Financial DIY, 9/21/09)
Real Estate as an Inflation Hedge? Don't Bet On It
(REIT Wrecks, 7/7/09)
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