from WJZ
Price Inflation Isn’t as Bad as You Think! It’s Worse.
by Mike Maharrey
GoldSeek
The political class keeps gaslighting us and trying to convince us that price inflation isn’t as bad as we think.
The fact is it’s probably worse than we think.
People like Paul Krugman keep saying Americans don’t realize how good they have it. Treasury Secretary Janet Yellen recently said she doesn’t experience sticker shock when she goes to the grocery. The White House spokesperson gets on the podium day after day telling us how great the economy is. Inflation is coming down, don’t ya know?!
Meanwhile, the rest of us are struggling to pay the bills.
How bad is it out there for the average person?
The National Debt is Crossing an Ominous Line
The U.S. has successfully navigated past debt challenges, notably in the 1990s. Policymakers can fix this if they find the will to do so.
by Veronique de Rugy
Reason.com
The United States is full steam ahead into uncharted fiscal waters, with rapidly growing federal debt promising a choppy economic future. Candidates Joe Biden and Donald Trump have added trillions to the national debt during their recent presidential administrations, leaving America at a critical juncture that demands urgent, bipartisan action.
If you read this column, you know the numbers are stark: U.S. government debt is projected to reach a staggering 122 percent of gross domestic product by 2034, far surpassing levels seen even during World War II. Not only is that a sharp rise from the current 99 percent, but it’s based on rosy assumptions about interest rates, inflation, and economic growth. The date to watch is 2038, when this ratio is poised to surpass the previous record from the pandemic year of 2020. The end of the pandemic, unfortunately, hasn’t quelled the pandemonium of spending.
Central Banks Are Winning the Battle Against Inflation, but the War is Just Getting Started
Politics and protectionism will make life difficult
from The Economist
The trajectory of inflation has not given central bankers much cause for celebration in recent years. But at the European Central Bank’s annual jamboree in Sintra, Portugal, this week, a touch of self-congratulation has been in the air. “I know it sounds a little bit arrogant,” confessed Christine Lagarde, the ECB’s president, on July 1st, but the unwinding of high inflation “is remarkable”. “We’ve made a lot of progress,” said Jerome Powell, the chairman of America’s Federal Reserve, the next day. Others agree. “Central banks have risen to the challenge” of high inflation, commends the Bank for International Settlements.
The data do indeed merit some satisfaction. After cumulative price increases between 2021 and 2023 of 15% in America and 18% in the euro zone, annual inflation rates now stand at just 2.6% and 2.5% respectively.
Inflation Saga Far From Over: Services CPI in the Euro Area Refuses to Slow for Eighth Month in a Row
by Wolf Richter
Wolf Street
Lagarde frets over surging labor costs feeding into services inflation.
In the 20 countries that use the euro, inflation in services increased again by 4.1%, same increase as in May – and both were the highest since October. The service CPI has gotten stuck at around 4% year-over-year for the eighth month in a row, after coming down substantially to that point.
On a month-to-month basis, services CPI jumped by 7.4% annualized and has been in that range and higher over the past five months. These super-volatile and highly seasonal month-to-month readings tend to be red-hot in the first half of the year and then fall later in the year.
New Fed Data Indicates Wages Won’t Offset Inflation Anytime Soon
from PYMNTS
Since the start of the pandemic, PYMNTS Intelligence has tracked the real impact of inflation, as real wages, adjusted for price increases, have failed to keep pace with sticker shock.
Coming into 2024, PYMNTS found that 85% of consumers said increases in their paychecks had not matched the pace of higher pricing. Eighty-two percent of respondents said concerns about inflation topped their lists of economic woes, and only 17% held out any hope that inflation would subside anytime soon. About 4 in 10 consumers said they anticipated a wage increase this year, down from 43% who expected a raise in 2023.
In the meantime, inflation is cooling a bit, at least as measured in the latest reading for May, at 3.3% annualized.
Any relief in the paycheck-to-paycheck economy may prove short-lived, however.
Powell Encouraged by Cooler Inflation Data: ‘We Are Getting Back On a Disinflationary Path’
by Jennifer Schonberger
Yahoo! Finance
Federal Reserve Chair Jerome Powell said Tuesday that he is encouraged by cooler inflation but reinforced that the central bank will need to see more evidence before cutting interest rates.
The last two inflation readings in April and May “do suggest that we are getting back on a disinflationary path,” Powell said while speaking on a panel in Portugal for a European Central Bank conference.
Powell’s comments come days after the latest reading of the Fed’s preferred inflation gauge — the “core” Personal Consumption Expenditures (PCE) index — rose 2.6% in May, in line with expectations and down from 2.8% in April.
That marked the slowest annual gain in more than three years.
On a month-over-month basis, the inflation measure rose 0.1%, also in line with expectations and down from 0.2% in April.
Yellen Denies Food Inflation
by Martin Armstrong
Armstrong Economics
Treasury Secretary Janet Yellen once again is once again gas lighting the public to believe that the Biden Administration has inflation under control. When questioned about the rising prices at grocery stores, Yellen denied that prices have soared astronomically.
“I think largely it reflects cost increases, including labor cost increases that grocery firms have experienced, although there may be some increases in margins,” Yellen, who has a net worth of $20 million, stated. She later touted that she met with several grocery store CEOs who said they were cutting costs. After all, Biden has continually blamed “greedy corporations” for rising food prices. “I think that’s to be applauded, I think that kind of thing is helpful, but I would be reluctant to agree that we should be centralizing agriculture,” Yellen added.
U.S. Inflation Slowing Again, but Fed Chair Powell Warns it Isn’t Yet Time to Cut Rates
by Christopher Rugaber
PBS
WASHINGTON (AP) — Inflation in the United States is slowing again after higher readings earlier this year, Federal Reserve Chair Jerome Powell said Tuesday, while adding that more such evidence would be needed before the Fed would cut interest rates.
After some persistently high inflation reports at the start of 2024, Powell said, the data for April and May “do suggest we are getting back on a disinflationary path.”
Speaking in a panel discussion at the European Central Bank’s monetary policy conference in Sintra, Portugal, Powell said Fed officials still want to see annual price growth slow further toward their 2% target before they would feel confident of having fully defeated high inflation.
ECB’s Lagarde Foresees a Bumpy Road to 2% Inflation Amid Uncertainties
by Piero Cingari
EuroNews
ECB President Christine Lagarde highlighted the complex journey towards the 2% inflation target at the ECB Forum on Central Banking in Sintra.
Christine Lagarde, President of the European Central Bank (ECB), highlighted the complex journey towards achieving the ECB’s 2% inflation target during her address at the ECB Forum on Central Banking in Sintra on Tuesday. Despite recent rate cuts and signs of disinflation, Lagarde emphasised the uncertainties that still loom large over the euro area’s economic landscape.
Speaking at a panel also featuring Federal Reserve Chair Jerome Powell, Lagarde explained the ECB’s decision to cut rates by 25 basis points in June.
Why You Should Invest in Gold Before the July Inflation Report’s Released
by Joshua Rodriguez
CBS News
The Bureau of Labor Statistics releases an inflation report every month. This report gives economists, investors and consumers an idea of how fast prices are growing in the United States. And, the state of price growth in the United States can impact financial markets. The precious metals market may also react to the next inflation report. And, that means the report can cause the price of gold to move.
The next inflation report will be released on July 11, 2024. This month’s report will show June’s inflation rate. And, this is a crucial report to watch. Inflation had cooled in April and May. Continued cooling of price growth could lead to a Federal Reserve rate cut.
But, regardless of whether inflation continues cooling or starts to pick back up, it may be a good idea to buy gold before the report comes out. Below, we’ll explain why you may want to act now.