from CNBC Television
Why Fast-Food Price Increases Have Surpassed Overall Inflation
by Ryan Baker
CNBC.com
Fast food has become increasingly expensive — and some consumers are changing their spending habits because of it.
Fast-food chains such as Chick-Fil-A and Taco Bell are included in the limited-service meals and snacks category in the consumer price index report, which shows prices are up nearly 28% from 2019 to 2023. The full-service meals and snacks category, which covers sit-down restaurants with servers, meanwhile, has increased about 24% and overall CPI was up by about 19% in the same time period.
“There were increased commodity costs. We’ve seen those start to normalize,” said Stephens analyst Jim Salera. “But what continues to be ahead of historical averages is the increase in labor costs that restaurants are seeing.”
Fed Official Urges Patience On Inflation
Get caught up.
by David Rovella
Bloomberg.com
Wait for it. That’s the message from Federal Reserve Bank of Richmond President Thomas Barkin, who said he expects high interest rates to eventually cool US inflation to the central bank’s 2% target. Barkin said Monday the strength of the labor market offers the Fed time to gain confidence that inflation is moving sustainably lower before cutting borrowing costs. But he cautioned that there still is risk that continued housing and services inflation will keep price gains elevated. Sellers are still trying to raise prices, he warned, and they will do so until customers push back strongly. “The risk is that, as we get less help from the goods sector, continued shelter and services inflation will leave the overall index higher than our target,” Barkin said.
Here are today’s top stories
Fixed income is living up to its name. And it shouldn’t be a surprise given US benchmark rates jumped from 0% to more than 5% in the span of just two years.
Visualizing Global Inflation Forecasts (2024-2026)
by Jeff Desjardinson
Visual Capitalist
Visualizing Global Inflation Forecasts (2024-2026)
Global inflation rates are gradually descending, but progress has been slow.
Today, the big question is if inflation will decline far enough to trigger easing monetary policy. So far, the Federal Reserve has held rates for nine months amid stronger than expected core inflation, which excludes volatile energy and food prices.
Yet looking further ahead, inflation forecasts from the International Monetary Fund (IMF) suggest that inflation will decline as price pressures ease, but the path of disinflation is not without its unknown risks.
Buy Stocks in May Because Inflation is Set to Plunge Through the Rest of 2024, Fundstrat’s Tom Lee Says
The stock market presents a buying opportunity this month, according to Fundstrat’s Tom Lee.
by Jennifer Sor
Yahoo! Finance, Canada
Speaking to CNBC on Monday, Lee pointed to March inflation numbers, with prices clocking in hotter-than-expected for the third month straight in March.
But elevated inflation readings have been largely due to lags in the official statistics, Lee argued. Real-time home and rent prices, for instance, are “stabilizing,” though shelter inflation rose 5.7% year-per-year in the official March report, he noted.
Fast Food Chains Are Getting the Message About Soaring Prices
Diners are “price weary” and eating out less often, restaurant executives told investors last week.
by Grace Dean
Business Insider
Many consumers are thinking carefully about how they spend every dollar, with some cutting back on visits to quick-service restaurants, executives told investors on a series of earnings calls last week. To win penny-pinching customers back, some say they’re planning smaller price increases for the rest of the year.
Many fast-food chains described a gloomy outlook. Wendy’s CFO Gunther Plosch told investors on Thursday that consumers are “still under pressure” — especially those with household incomes under $75,000. “They are reducing frequency, so visitation is down.”
Chains raised prices drastically during the pandemic to offset rising labor and food costs, and it’s coming back to bite them. Some diners are cutting back, saying that fast food is just too expensive and no longer represents good value.
Americans Are Still Really Worried About Inflation
And for good reason: Even at 3.5 percent, inflation is running higher than it did in almost every year for three decades before 2021.
by Eric Boehm
Reason.com
From President Joe Biden’s point of view, Americans ought to be thrilled with the recent trends in inflation.
“Wages keep going up and inflation keeps coming down,” the president victoriously declared at the State of the Union address in early March. The administration’s economic messaging has consistently stressed that lowering inflation is Biden’s “top economic priority” and that progress is being made toward the goal of taming price increases. “Inflation has fallen 60 percent from its peak,” the White House pointed out in a statement after the most recent Consumer Price Index report. “We’re making progress: wages are rising faster than prices, incomes are higher than before the pandemic, and unemployment has remained below 4% for the longest stretch in 50 years.”
Fed’s Williams Says 2% Inflation Target ‘Critical’
by Ann Saphir
Reuters.com
PALO ALTO, California, May 3 (Reuters) – The U.S. central bank’s 2% target for inflation is key to achieving price stability and essential for ensuring economic prosperity, New York Federal Reserve Bank President John Williams said on Friday.
His defense of the inflation target comes amid persistent calls from some corners for the Fed to overhaul the way it guides, sets and communicates policy.
“Theory and experience have also shown the importance of transparency and clear communication, including setting an explicit, numerical longer-run inflation target, and of taking appropriate actions to support the achievement of that goal,” Williams told a monetary policy conference at Stanford University’s Hoover Institution. “These are critical in anchoring inflation expectations, which, in turn, help keep inflation at the target.”
The Reasons the Fed’s Bowman is “Willing” to Hike Rates if “Data Indicate Progress On Inflation Has Stalled or Reversed”
by Wolf Richter
Wolf Street
She nails it with her list of inflation-fueling factors. It parallels what Powell said more softly at the press conference.
The first three months of the year have produced a nasty re-acceleration of inflation in the US. It was across the board: in the Consumer Price Index, in the Fed-favored PCE price index, in the Producer Price Index, in the quarterly Employment Cost Index (for two quarters in a row). The Fed is beginning to adjust to this new scenario, and a rate hike — instead of rate cuts — is now back on the table and keeps getting talked about.
Even – or especially? – after looking at the results of the jobs report on Friday, Fed Governor Michelle Bowman said in a speech that she remains “willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.” This parallels what Powell said more softly at the FOMC post-meeting press conference. No disagreement there.
Inflation is Transitory Again
by David Haggith
GoldSeek
As Powell clasps his hands in desperate hope without any evidence to back his hope, the US Treasurer today, like the Treasurer in yesteryear, is giving a solid thumbs-up to his plan, which is already accomplishing everything the Treasury desperately needed.
After yesterday’s low “jobless claims” report that held unemployment steady and that looked rigged to hit a targeted goal (again), today delivered a “new jobs” report that came in (at 175,000 new jobs), well below expectations of 240,000. By that report, the unemployment rate ticked higher from 3.8% to 3.9%.
As I commented yesterday, we may be nearing the point where all the layoffs this year and last year are bringing jobs down enough to where they will finally start to come in line with available workers. Once that threshold is met, unemployment can rise when and if layoffs are higher than normal.
Globalist Magazine Admits Joe Biden’s Migration Spikes Inflation
by Neil Munro
Breitbart.com
President Joe Biden’s mass migration is raising inflation, chiefly by raising housing prices, according to the Economist, a U.K.-based pro-globalism magazine for elites.
Citizens’ rents, per-capita wages, and workplace productivity are being damaged in the United States, Australia, the United Kingdom, Canada, and other wealthy countries where governments are extracting migrants from developing countries, says the April 30 article, headlined “Immigration is surging, with big economic consequences.”
“Immigration’s impact goes well beyond an arithmetic effect on GDP [Gross Domestic Product] — it extends to inflation, living standards and government budgets,” the April 30 article admits as it debunks the elite narratives: