Jim Ulvog

The Personal Consumption Expenditure (PCE) inflation index increased 0.6% in November.  This after the 0.6% in October 2021 increase was revised upward from 0.6% to 0.7%.

The core PCE inflation rate (without food and energy) was 0.5% in November and 0.4% in October.

This indicates inflation is continuing. When you look at all of 2021 perhaps inflation is accelerating.

Personal Consumption Expenditure index for November 2021 shows continuing high inflation.Read More »

The Producer Price Index (PPI) in November 2021 shows inflation is running hot with 0.8% increase for the month.

This follows revised 0.6% for each of the three previous months (August, September, October).

I suppose this four-month run can be considered an improvement over the previous four months which were 1% in April and 0.9% in each month of May, June, and July.

That is an average of 6.5% for the last four months, down from an average of 9.25% for the preceding four months. The average monthly increase in the PPI for 2021 is a whopping 0.82%. Per month.

Graph at the top of this post shows the monthly change in final demand (the headline number) in blue. The average of the change for the latest three months is in green. The red line shows core change, which excludes food, energy, and trade.

The PPI calculation has many subcomponents, just like the CPI and PCE. Let’s look at the breakout between producer price increases for final goods and increases for final services. Following graph shows Total final demand, Final demand goods, and Final demand services. In other words the total price run up with a breakout between goods and services:

Producer Price Index increases 0.8% in November 2021.Read More »

Variety of articles are pointing towards higher inflation on the horizon. An increasing number of articles I’ve seen point towards inflationary expectations getting built into thought process of consumers and companies.

Articles for your consideration:

• Kraft Heinz product line will see an average of 5% increase at the start of 2022.
• Many companies are planning large raises in 2022, averaging 3.8% in one survey.
• Background article by AP speculates high inflation will continue well into 2023. Other articles are providing similar speculation.

Post-Millennial – 11/9/21 – Kraft Heinz to raise prices of products up to 20% – Average price increases by Kraft Heinz for the entire product line will average 5% starting 1/9/22. Specific product lines will see dramatic increases, such as 16% for Jello and puddings, 10% for Bagel Bites, with the headliner of 20% being Mac & Cheese.

Inflation is going to continue at high rate, if not accelerate.Read More »

The Consumer Price Index (CPI) increased 0.8% in November after a 0.9% increase in prior month.

That is 2.1% for the last three months, which would be about 8.4% if the increase in the last three months continued for a year.

Graph at top of this post shows the monthly increase in the all-items index along with the core change, which excludes food and energy. Graph also shows an average of the preceding 12 months for the all-items indicator.

The 12 month cumulative change is distressing. The monthly change in all items index and the cumulative change for 12 months looks as follows:

Consumer Price Index increases 0.8% in November 2021 after 0.9% run-up in October. Twelve month increase rises to 6.9%.Read More »

Wow. Am I confused.

The number of people filing first-time claims for unemployment is now at the level before the pandemic started.

For the week ending 12/4/21 there were 184,000 new claims. The four-week average is 219,000 which is almost a match to the average of 212,000 average in January and February 2020.

The number of people drawing unemployment insurance is 1.99 million which shows a continual decline and is approaching the 1.72 million average before the pandemic.

Yet the civilian labor force is still 2 million below the start of the pandemic and the number of people not in the labor force is 5 million higher. Everywhere you look you see help wanted signs and in my tiny corner of the world I have seen restaurants cutting back service or closing in the middle of the workday. Everywhere you look you read about a massive shortage of staff.

Part of the explanation for this confusing picture is common to read about the surprisingly low number of new claims. Speculation in several articles I read is this reflects employers being very hesitant to let go of workers if they think they will be unable to find new staff if needed in the near-term.

For example, consider this report:

First-time claims for unemployment now below the level when the pandemic started. Ongoing claims for unemployment continuing to decline as of the end of November 2021.Read More »

The Personal Consumption Expenditure (PCE) inflation index increased 0.6% October 2021.  This is a jump from the 0.4% in July, August, and September.  The 0.6% matches the increase in March and April.

The core PCE inflation rate was 0.4% in October which is in the middle of the range from March 2021 through September.

This indicates inflation is continuing and perhaps accelerating.

The cumulative 12 month change, according to BEA, has risen to 5.0% for the 12 months through October 2021, compared to 4.2% for the 12 months ending September.

Personal Consumption Expenditure for September 2021 shows high inflation rate is continuing.Read More »