from Gregory Mannarino
Beneath the Skin of CPI Inflation: A Stunning Outlier Services CPI Drove Down Everything Else
by Wolf Richter
Wolf Street
Services are big, and that one-month outlier was massive, and it drove down Core CPI and overall CPI.
The Consumer Price Index for May, on a month-to-month basis, was pushed down by the continued sharp drop in durable goods prices, a drop in energy prices, flat food prices, and “core services” prices that rose at the smallest pace since late 2021 in a stunning whiplash-inducing outlier move, according to data from the Bureau of Labor Statistics today. So, we’ll start with that outlier because it’s so big, and because core services are so big — they account for 65% of total CPI — and because that outlier drove everything else.
Inflation… Market Insanity Continues
by Karl Denninger
Market-Ticker.org
This is not a “cold” report folks….
The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged 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 3.3 percent before seasonal adjustment.
The unchanged was caused by a decrease in gasoline, mostly, which everyone has seen in advance.
But the index in rents and owners equivalent rent were both up 0.4% which would annualize to 4.9%, or 2.5x the Fed’s “target” in these very large and unavoidable consumer expense. Further, medical care (another mandatory expense for most) was up even more, up 0.5% on the month and what’s worse is that prescription drugs were up 2.1% on the month which would annualize to more than 20%.
Inflation Cools More Than Expected, Providing Relief for Consumers and the Fed
by John Carney
Breitbart.com
America got some good news on inflation on Wednesday, possibly opening the door for lower interest rates this year.
The Consumer Price Index climbed 3.3 percent in May from a year earlier, down from 3.4 percent in April, the Labor Department reported.
The “core” index—which excludes volatile food and energy prices to provide a clearer view of the underlying trend—rose 3.4 percent last month, down from 3.6 percent the previous month. That is the lowest annual increase in core prices since April 2021.
Compared to the prior month, the broad measure of consumer prices was unchanged. Core prices increased by 0.2 percent.
The Fed’s Whipped Inflation!
by Brian Maher
Daily Reckoning
Touch off the rockets! Light the sparklers! Raise a joyous toast!
That is because May’s inflation data came issuing this morning. And it disappointed expectations — or rather exceeded expectations.
A Dow Jones survey of economists had divined a 3.4% inflation rate. Yet the United States Department of Labor reported a mere 3.3% inflation rate.
We can only assume you are as gleeful as us. Media outlets are. They appear to believe it represents a triumph.
Does it? We are far from convinced that it truly represents a triumph. CNBC:
FOMC Holds Rates, Revises Forward Guidance
by William J. Luther
The American Institute for Economic Research
As anticipated, the Federal Open Market Committee (FOMC) voted to hold its federal funds rate target in the 5.25 to 5.5 percent range on Tuesday. FOMC members also revised their forward guidance for the future path of interest rates. Back in March, the median FOMC member projected the midpoint of the federal funds rate target range would fall to 4.6 percent this year, equivalent to three 25-basis-point cuts. Now, the median FOMC member projects it will fall to just 5.1 percent, equivalent to just one 25-basis-point cut.
The FOMC’s plan to hold rates higher for longer is not limited to 2024. The median FOMC member now projects the federal funds rate will be 4.1 percent in 2025, compared with the earlier projection of 3.9 percent. The median FOMC member also revised up the longer run federal funds rate projection, from 2.6 percent to 2.8 percent.
Bidenflation: Cost of Raising Children in America Increases
by Amy Furr
Breitbart.com
Stubbornly high inflation is making it more difficult to raise a child in President Joe Biden’s (D) America, per LendingTree.
LendingTree Chief Credit Analyst Matt Schulz told Fox Business that prices for everything have continued to rise, adding, “There’s so much that goes into child care, including rent, payroll, insurance and much more. When all those costs shoot up, the overall cost of child care does, too,” the outlet reported Monday.
The article continued:
The cost of child care surged nearly 20% between 2016 and 2021, the latest year for which complete data is available, according to LendingTree. Annual expenses, excluding tax exemptions or credits, hit $21,681 in 2021, versus $18,167 in 2016, the data shows. That means the typical family is spending about $237,482 over the course of 18 years to raise a child — and that is excluding the cost of college.
The news comes as “expectations for inflation over the next five years have surged back to their highest levels of this economic cycle,” according to a Breitbart News article published on Monday.
Here’s What to Look for From the May CPI Report
by Simon Moore
Forbes
May’s Consumer Price Index release is expected to show cooling headline inflation, though core inflation may remain sufficiently high that the Federal Reserve is unlikely to cut interest rates soon. Ultimately, the Fed is not expected to cut interest rates in June and instead wait for more supportive data before potentially cutting interest rates later in the year.
May CPI Release Timing
May CPI data will be reported at 8:30 a.m. ET on Wednesday, June 12. Previous monthly figures for 2024 have seen 0.3% to 0.4% increases for both monthly headline and core inflation. Core inflation excludes food and energy price changes.
Consumers, Inflation, and the Great Wealth Divide
from Zero Hedge
How is inflation impacting the average consumer, and what does it mean for the wealth gap? David Lin, Host of The David Lin Report (@TheDavidLinReport) , joins Anthony Scaramucci on ‘Speak Up’ to discuss the significant impact of inflation on everyday consumers, the widening divide in wealth and his own investment strategies to help build and protect your portfolio. In this episode of Speak Up, David Lin provides his overview of the current state of the economy and its impact on investors and consumers. David and Anthony dive into the latest trends shaping markets, touch on the role of fiscal policies have on wealth distribution, and the critical steps you need to further grow your wealth and stay ahead during volatile times.
Gold: Tactics For CPI and FOMC Surprise
by Stewart Thomson
GoldSeek
1. Most gold bugs agree that owning gold feels fantastic… on days when the price is up. Recent key reports and events have brought increased volatility to the market, and this has surprised a lot of investors.
2. The Chinese PBOC failed to buy any gold in May. While they typically only buy 15-20 tons each month, the failure to buy shocked futures market traders and they sold in a panic. Savvy Indian citizens likely have bought all the gold the PBOC failed to buy since then, but their action doesn’t get the headline news that the PBOC gets.
3. The PBOC fiasco was followed a few hours later with the US jobs report. While many gold bugs view this report as questionable at best (and completely fake at worst), the fact remains that it shocked investors and they panicked as gold fell violently, to a price they didn’t expect…
Inflation’s Sting: Will You Become a More Savvy Shopper?
by Paul Davidson
USA Today
Inflation finally pushed Mark Hawkes to a breaking point.
So a few months ago, he canceled his gym membership.
“I can do workouts at home,” especially isometric exercises, says Hawkes, who is 62 and lives in Madison, South Dakota.
He also plans to downgrade his family’s cable TV service significantly, and may even cut the cord, relying on over-the-air TV and streaming services.
At the same time, he’s spending $2,500 to remodel his bathroom, a project that wasn’t exactly a must-do.