• 287 days Will The ECB Continue To Hike Rates?
  • 287 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

Summary of My Post-CPI Tweets

The following is a summary of my post-CPI tweets. You can follow me @inflation_guy.

  • Core CPI only 0.11% unrounded, 1.94% y/y. Large fall in apparel prices partly to blame.

  • Suspect there may be some seasonal issues since last 3 months were weak in both 2011 and 2012.

  • Key thing looking forward is that rents and OER both continue to motor higher...and no sign of stopping.

  • also big drop in 'lodging away from home.' Always some quirky stuff out of 200 item indices, and I don't like to 'ex out' everything.

  • Core services inflation remains +2.5% y/y; core goods inflation drops from +0.7% to +0.5%.

  • Owner's Equiv Rent y/y went from 2.140% to 2.125%. Primary Rents went from 2.75% to 2.73%. That's 30% of consumption right there.

  • Accelerating: Food&Bev, Housing, Recreation (61.1%) Decel: Apparel, Transp, Med Care, Other (32.2%). Unch: Educ/Comm (6.7%)

  • Transp fell because of Motor Fuel, of course. Apparel because Girls Apparel plunged. Really.

  • Nothing here disturbs what we see as the underlying dynamic for inflation. Our 2013 forecast range for core remains 2.6%-3.0%.

Most forecasters are projecting a decline in core inflation over the next year. However, the chart below, which I've shown before, illustrates why almost a third of the consumption basket (and 40% of core inflation) is very likely to continue rising. Home prices and direct rents have responded very well to the Fed's aggressive easing campaign, and (with a lag) the 5% rise in the FHI Home Price Index and the 11% rise in the median prices of Existing Homes are being reflected in primary rents and OER.

 


I've put together a little press release/summary that may be useful for journalists, as we're trying to generate more exposure (and new client inquiry) in 2013 for Enduring Investments. Please drop me a line if you know of someone in the media who ought to be on that list!

 

Back to homepage

Leave a comment

Leave a comment