from Bloomberg Television
Cramer Explains Why Food Delivery Stocks Are Doing Well Even as Consumers Rebel Against Inflation
CNBC’s Jim Cramer on Thursday told investors food delivery isn’t a habit consumers want to break, even as they feel the weight of inflation.
by Julie Coleman
CNBC.com
CNBC’s Jim Cramer on Thursday analyzed why food delivery companies are seeing success while many of their consumer discretionary peers suffer as users continue to feel the burden of inflation.
He said food delivery is a habit consumers don’t want to break — something they seem more willing to spend on than other luxuries.
“DoorDash and Uber Eats and Instacart can only put up numbers like these because food delivery has become a calcified habit for so many consumers, people who value their time as much as they value their money,” Cramer said. “No wonder people don’t have excess cash to throw around — they’re spending it all on DoorDash.”
Fed’s Schmid Says He’s More Confident Inflation Heading to 2% Goal
by Reuters
Yahoo! Finance
“Given the multi-decade shock to inflation that we have experienced, we should be looking for the worst in the data rather than the best,” Schmid said, noting that prices can be volatile and the Fed needs “longer periods” to be sure of inflation’s path.
Different Household, Different Inflation Rate
by Regina Kiss and Georg Strasser
CEPR
Households differ considerably in terms of the inflation they experience at any point in time. This column examines the nature and sources of inflation differences for purchases of supermarket goods across a large panel of French and German households. The main reasons for the differences are that prices (and thus price changes) differ from place to place and that households do not all buy the same products. Households adjust their purchases over time, but not enough to offset these differences.
The differences between households in terms of their exposure to inflation have gained a lot of attention, especially since the recent jump in the cost of living. Their different inflation experiences feed into different inflation perceptions and expectations (D’Acunto et al. 2021, Weber et al. 2022). In turn, this can mean that households seemingly react differently to aggregate inflation. Moreover, systematic inflation differences among households can have distributional effects. For example, because poorer households spend a larger share of their income on food, an increase in food prices reduces their purchasing power relatively more.
What to Expect From the Next CPI Inflation Report
by Simon Moore
Forbes
July’s Consumer Price Index inflation report is expected to continue the pattern of disinflation seen in recent months. Current expectations for a September rate cut are relatively high, so it is unlikely that anything but the most alarmingly high CPI inflation data would prompt the Federal Open Market Committee to avoid a broadly anticipated interest rate cut at their next scheduled meeting on September 18.
Release Timing
July’s Consumer Price Index inflation data will be released on August 14, 2024, at 8:30 a.m. ET. June’s headline CPI data saw -0.1% monthly price change and 0.1% for core CPI. Core CPI removes moves in food and energy prices. June’s CPI report posted 3% headline CPI annual inflation and 3.3% core inflation.
The Fed Prescribes Stool Softeners for America
by Peter Schiff
Schiff Sovereign
On Wednesday, March 8, 2023, Fed Chairman Jerome Powell was sworn in for testimony in front of members of Congress to deliver remarks about the state of the US economy.
Inflation had been raging for well over a year at that point, and, in response, the Fed had rapidly increased interest rates to levels not seen since 2007.
But nothing happens in a vacuum. The Fed cannot expect to jack up rates without some major consequences. And concerned members of Congress asked the Chairman about these potential consequences.
But Chairman Powell played them off, practically dismissing any risk to their raising rates and ‘tightening’ monetary policy, saying “nothing about the data suggests we’ve tightened too much. . .”
The High Cost of Cheap Money
by Brian Maher
Daily Reckoning
The stars were once again in their courses yesterday… oil was poured upon troubled waters… the dip was bought.
All was peace.
Following Monday’s sharp unpleasantness, the stock market went trampolining back.
Yet gravity reasserted itself today.
The Dow Jones Industrial Average fell 234 points earthward.
With it came the S&P 500 and Nasdaq Composite.
Kamala On Inflation – Ignoring the Elephant in the Room
by Martin Armstrong
Armstrong Economics
Kamala has a plan to conquer inflation – increase government spending and raise taxes! She has been avoiding the topic in recent speeches, but her past comments can give us some insight.
Before the government passed the Inflation Reduction Act, the largest government spending package in our nation’s history, Harris praised the Build Back Better agenda for working to lower costs for the average American. The Inflation Reduction Act was originally the Build Back Better Act and the Democrats were seeking $2.2 trillion in funding. “And, Build Back Better is not going to cost anything — we’re paying for it. So when we can get Build Back Better passed, and we are optimistic that we will, the American people will see costs actually reduced around some of the most essential services that they need to take care of their basic responsibilities, including issues like child care and elder care, and also preschool,” Harris said.
Used Car & Truck Prices Suddenly Bounce, Inventories Tighten: End of Historic Plunge That Pushed CPI Inflation Down?
by Wolf Richter
Wolf Street
That would be a bummer for CPI Inflation over the coming months.
This may be it, the end of the historic plunge of used-vehicle prices that has unwound 60% of the even more historic price spike during the pandemic. The price plunge, which kicked off at the end of 2021, has been a substantial force in bringing CPI inflation off its highs, and it would be a bummer if that flipped now.
Prices of used cars, SUVs, pickup trucks, and vans that were sold at auctions across the US jumped by 2.8% in July from June, seasonally adjusted, the biggest jump since the surge in early 2023, according to today’s Used Vehicle Value Index by Manheim, the largest auto auction house in the US which runs about 8 million vehicles a year through its auction lanes. The index is adjusted for changes in mix and mileage (red in the chart).
Disney Shares Plummet as Theme Parks Hit Hard by Inflation
by David Ng
Breitbart.com
The Walt Disney Company has warned that its theme parks are facing trouble as record inflation has made a trip to the Magic Kingdom unaffordable for millions of middle and working class Americans. The news sent Disney shares crashing more than 3 percent during the day on Wednesday.
During its quarterly earnings call, Disney specifically cited inflation when it said that its “Experiences” division — which includes theme parks, cruise ships, and other live entertainment offerings — will see a decline in income in the next few quarters.
Disney’s chief financial officer Hugh Johnston said lower-income consumers are being hit hard in the current economy and as a result, are no longer visiting Disney parks like they used to. For the most recent quarter, Disney reported its Experiences operating income fell 6 percent.
Americans Prepared for Lasting Inflation
by Martin Armstrong
Armstrong Economics
Americans are preparing for a prolonged inflationary period, based on new data from the New York Fed. The New York Federal Reserve’s Survey of Consumer Expectations found that Americans are still pessimistic about inflation waning, with no one now believing it is transitory. The median expectation is that inflation will remain at the 3% level in 2025.
The public does not anticipate inflation tapering off in a meaningful way in the years to come. The Federal Reserve is still honing in on that 2% target but the people have lost confidence in its ability to do so. Most Americans see inflation sitting at 2.9% in three years from now, up from the 2.4% estimate in January 2024. Even in five year’s time, the average consumer believes inflation will be above target at 2.6%.
The central bank believes they can meet that 2% target. Policymakers believe inflation will fall to 2.1% by 2025 before finally reaching 2% in 2026. Amid the sell off this week, Chicago Fed President Goolsbee came out and said that the central bank will simply “fix it” if the economy continues to deteriorate.