Inflation Rises as CPI Gains, Housing Stars Decline
June
17 (Bloomberg) — Bloomberg’s Michael McKee breaks down economic data on
inflation, CPI and housing starts for the month of May. He speaks on
Bloomberg Television’s “Bloomberg Surveillance.”
CONSUMER PRICE INFLATION PICKS UP
Evidence is mounting that inflation is starting to accelerate.
New
data released this morning shows that consumer prices climbed 0.4%
month-over-month in May, which was higher than the 0.2% expected by
economists.
Excluding food and energy, CPI increased by 0.3%, which was a tick higher than the 0.2% expected.
This was the strongest gain in core CPI since August, 2011.
On a year-over-year basis, prices climbed by 2.1% and 2.0% respectively.
What “Low-Flation”? Core CPI Jumps Most In 3 Years As Food Costs Push Higher
Does this look like the Fed has inflation concerns under control?
Driven by “Food at Home” costs soaring…
Housing Starts Fall More Than Expected
Housing starts fall 6.5% in May to 1 million annual rate
Is the economy really picking up? Not likely
Commentary: This doesn’t feel like a real recovery
The real world is telling
us a different story than the pundits think they see in their crystal
balls. Rather than picking up, the economy is still plodding along, not
necessarily declining — but not shifting into high gear either.
Take retail sales, for
example. They represent one-third of the economy and two-thirds of total
consumer spending. In May, they rose only 0.3% — less than half the
0.7% expected by the Street.
Even this was worse than
it looked. Take autos out of the picture, and sales barely budged,
rising 0.1% compared with the consensus forecast of 0.4%.
Housing is still in the basement. Builders’ expectations may be bright, but they have yet to ramp up the pace of home building.
Rather than fall in the
latest week as was thought, new claims for unemployment benefits rose.
Employment is still weak, the long-term jobless rate remains at a
postwar high, and would-be workers continue to leave the labor force,
discouraged by the lack of job prospects.
The recent jump in oil
prices will hurt buying power as it ripples through the pipeline to the
ultimate consumers of gasoline, heating oil, fuel for industry, and,
yes, prices of items that are made with oil, such as plastics. This
comes as people are trying to cope with the rising cost of food and
health care.
Rubino: Odds of another oil crisis, central banks buying trillions of dollars of stocks
“If the
Middle East blows up here, we basically have nothing to show for 40 or
50 years of extremely high, extremely expensive intervention over there,
you know, because we’re right back where we started, except we’re more
deeply indebted than ever.”
“[China]
has accumulated the biggest stock portfolio in the world…That explains,
in part, while the world’s equity markets have held up so well: you’ve
got all this public sector money flowing into private sector equity
investing. It wouldn’t be a surprise if the U.S. was also doing this…”
Behind the cornucopia of higher food prices
Alert
shoppers are accustomed to watching food prices go up and down. But a
string of forces—from droughts to diseases—is raising the cost of a trip
to the grocery store at a rapid clip.
And it looks like it will be a while before the price pressure eases.
Why Q2 GDP Will Disappoint In 1 Chart
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