Posted on 01/15/2015 9:39:57 PM PST by blam
Myles Udland
January 15, 2015
The crash in oil prices might be good for consumers, but it's terrible for inflation data.
The US Bureau of Labor Statistics is set to release the consumer price index on Friday morning at 8:30 ET. The index is a measure of consumer prices, and the most popularly cited measure of inflation.
Expectations are for headline inflation to fall 0.4% in December compared to the prior month, which would be the largest month-on-month decline since December 2008.
Compared to last year, headline inflation is set to rise 0.7%.
"Core" inflation which strips out the cost of food and energy and is the number more closely watched by economists is expected to rise 0.1% in December and 1.7% when compared to last year.
Most of this decline in inflation is expected to be a result of the drop in oil prices, which has in turn sent gas prices to multiyear lows.
In a note to clients ahead of the report, Brian Jones at Societe Generale wrote that, "Reflecting a projected 12.1% dive in seasonally adjusted gasoline pump prices, the CPI energy cost gauge likely fell by 5.4%, shaving one-half percentage point off the headline measure last month."
And so decline in gas prices will be responsible for all of the decline in the headline index come Friday morning.
(snip)
(Excerpt) Read more at businessinsider.com ...
Read the article. It describes how the two different inflation measures are calculated: “headline” inflation (which includes food and energy) and “core” inflation (which excludes them).
I did read the article and it wouldn’t change my reply. Bad inflation is not declining inflation.
LOL!
That’s easy. Production lag: Food being sold NOW, was produced and prepped for market under MUCH higher food prices.
And the various droughts have driven up costs in several sectors: California-grown produce, and overall, in Beef and Pork: the herds have been smaller over the past few years, and demand is rising. . .
REGULATIONS!
Core inflation.. That's the one you see on the NEWS when they want you to forget the price increase in food and gas. The increases anyone who actually shops every week sees.
Increases such as 1 lb pkg of pasta is now 12 oz, the 1 qt mayo is now 30 oz, doz eggs was 1.00, now 1.30. Beef up 30%.
Gas way up.
Simple gov manipulation of the facts, who'd thought?
The MSM parrots pass it on.
Because they are all government handouts that are indexed to inflation?
You print money, it is worth less = inflation. Why is this surprising to anyone? what is surprising is that they continue to do it monthly.
Inflation is not good for government if it means increased interest rates. Our debt servicing costs will skyrocket if we ever return to historical norms in terms of interest rates.
...using military weapons made in the USA...
Or uber elites.
Well, pardon me, should have said ONE of the major reasons.
But realize, even the fortunate folks with jobs (not affected by regulations and unemployment) have been just paying bills, getting a little food and gas...and that’s it. Talking about the mainstream population here. No extra money to spend at all. Just getting by. That’s millions of people not being able to stimulate the economy.
High cost of food and gas has had a devastating impact on their lives. Lower prices will definitely help the U.S. economy.
Yes, that would be sweet for our arms industry.
I remember reading something about the Korean War years ago; apparently the Red Chinese used a Soviet-built machine gun that was .51 caliber - it could use .50 caliber rounds captured from the Americans, while Americans couldn’t use any rounds from the .51 - they were the slightest bit too big.
Cheap gas is real nice--if you have an income--a cheap commute only works if you have a job.
Now, let' look at some real numbers.
If you are driving 15,000 miles a year, in a vehicle that gets 25 MPG, your annual savings will be 15000/25 times the number of dollars per gallon you 'save'. If you are getting your fuel at two dollars cheaper, that's 1200 dollars a year, 100 dollars a month, or (roughly) 25 bucks a week. That will put a few burgers on the grille over the weekend, but not a heck of a lot more.
Now, I have lived so lean that would seem like a fortune, but that isn't going to buy any new cars. In fact, if the EPA (Obama and the ecowhackos) get their way, you'll need it to pay the light bill.
Ultimately, I'm not too worried about the oil patch. It has survived ups and downs before, as have all the folks who work there. some fat will be trimmed, incredibly efficient drilling and completion techniques will be made even more so, and life will go on.
What does concern me, is that these savings aren't going to open up a few million new jobs, aren't going to put the rest of America back on the track of creating wealth, and are just going to result in a modest binge of minor spending. There is already talk of taxing fuel even more, which will snatch the small savings from the very hands lauding cheaper fuel. Oil dropped and the Feds were first in line to suck the money out of your pocket.
That is the other 'growth' sector in the economy: more government, more regulation, and more ways to hand out Americans' hard earned dollars to people who have no business being here in the first place. Call it "paybacks" for European colonialism, 'reparations', or just screwing the taxpayer, but it is a redistribution of wealth on a scale never before seen, not just stopping with the current taxpayer, but amassing a non-serviceable debt that will be the downfall of our country.
Agree with you totally. Truly sad what is taking place in our country. Seems there is very little people can do. Even when there is victory at the ballot box, little change (for conservatives) takes place. Government regulations have turned in to a menance. The oil patch will most likely survive as you said. And in the meantime, several million Americans are getting some much-needed relief at the gas pump. Now, next step is conquering those high food prices...
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