Goldman Sachs Expects “Significant” Decline in US Inflation!
Mate27
TUSCL’s #1 Soothsayer!
Nov 14 (Reuters) - Goldman Sachs said it expects a "significant" decline in U.S. inflation next year due to easing in supply chain constraints, a peak in shelter inflation and slower wage growth.
The U.S. lender on Sunday forecast core personal consumption expenditure (PCE) –– the Federal Reserve's preferred measure of inflation –– falling to 2.9% by December 2023 from 5.1% currently.
The forecast comes as Fed governor Christopher Waller warned over the weekend that the central bank may consider slowing the pace of rate increases at its next meeting but that should not be seen as a "softening" in its commitment to lower inflation.
Told you so!! I was going to add this onto my prior threads, but this definitely deserves a new thread so nobody has to sift through hundreds of comments that basically said I was crazy for surmising such a thought, ie SkiDumb and Icee. Any way, a humble brag on my part I suppose. It still translates to whatever increases we saw are behind us. This isn’t the 70’s or the 80’s, because productivity is much better in present day with technological advances, keeping costs from escalating forever.
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I'm no expert, but I'm going to hazard a guess that you don't work in any type of economic or other data analysis role in your day job. 😂
I'm not even going to get into why "core" PCE does not accurately reflect real price increases facing households. I'm going to let you think about it instead. Take all the time you need Mate. 😉
Tye only thing yiu need to “think” about is what I tried stating several times, they’re rear facing views and my reports have been forward looking at the leveling off of these reports going forward. Warrior, my prior thread wasn’t me necessarily stating prices were as a whole dropping, it was pointing to the analyst from Wall Street that have perspective. Anyway, in 6-12 months the analysis for my day to day activities will pay off for nice gains in equities, and then yiu can get all emotional about it like you did about the current inflation rate. Bongiornio bitches!
Well, maybe not directly but Beijing Don making COVID seem like a big joke that would blow over in a week is definitely the cause of the stock market meltdown in 2020.
It doesn't matter how you slice it, Fred Trump's piece-of-shit son was never good at anything, whether it's real estate, running a casino, or maintaining a healthy marriage. He's a big fail at everything except marketing and self-promotion, so he's just a dumber version of PT Barnum. Big whoop. At least PT Barnum gave me a clown show that was entertaining, and not running a country where we're all trying to make a decent living and raise kids.
Where is all this free money "flooding" the market? You right wingers just spew a lot of word salad nonsense that only makes a Faux Fake News chimp scream.
Look up something called the "Phillips Curve" --- perfectly explains why low unemployment leads to consumer price inflation, stupid.
https://www.youtube.com/watch?v=y234PB-O…
More I told you so news!
Over the weekend, analysts from Goldman Sachs forecast that one key measure of inflation — the core price consumption expenditures index, or core PCE — could drop to 2.9% by the end of 2023.
Core inflation is different from headline inflation. Core inflation excludes food and energy prices, which tend to swing more frequently and dramatically than other prices. The Federal Reserve keeps a close eye on core PCE inflation, and targets a level of 2% in a healthy economy. (To make it even more confusing — these numbers are different from inflation measured via the consumer price index, or CPI, which came in at 7.7% on an annual basis in October, down from 8.2% in September.)
Right now, core PCE is at 5.1%. Goldman’s experts expect that number to drop as supply chain constraints improve, rental price growth slows down, and wage growth slows down, too. Those three factors are signs the economy is on its way back to a healthier state.
Other experts agree, though some are more optimistic than others
Sending $1200 checks to people to pay back rent and overdue credit card bills is "flooding the market with money" and causes reactionary inflation LOL.
A low IQ anti-Semite like Dave is good to laugh at and a punching bag for a witty Dem like me, but not much else :-)
You're mocked in here a lot, Ski-Fagg. I've crushed Boston ass clowns like you and rolled ya into ditches. It's easy and a lot of fun.
I guess your inability and/or unwillingness to think is why you're sucking Goldman economist cock, lol.
Core readings do not exist in a vacuum. If you back out food and energy, you remove a critical component in the analysis. When both are rising at outsized proportions, of course inflationary pressures in other areas will lessen. Who is buying computers and expensive TVs when a lot more of their money is being consumed by groceries and electricity?
So the "headline" CPI matters a lot, especially when price rises in energy and food are partially labor-related. Until the Fed can do enough to slacken tightness in the labor markets, inflationary problems are going to persist.
What the stock market is betting on right now is that the Fed will tolerate higher inflation rather than do something which will firebomb the broader economy. I suspect that they are right, but until we finally get serious about quashing inflation, it's just going to be death by 1,000 cuts. People feel energy and food cost increases far more than those in most other areas, though insurance rates are also going up by much higher %s than the "core" reading.
Exactly. The Feds will selectively and minimally raise interest rates until they see a lessening of demand for consumer goods, outside of food and energy which are basic needs. Jeff Bezos just went on TV and told people to hold off buying a new car or big screen TV and focus on the basics like paying rent and your grocery bill. Pretty amazing considering he's the guy who became filthy rich off people buying stupid shit on his website.
Yup. Everyone buys auto insurance and rates keep rising fast, eating into monthly budgets. Home and health insurance has been rising fast too. When you couple those with recent spikes in electricity and food costs, people who are living paycheck to paycheck are getting clobbered right now. Those same people also often carry credit card balances and they're getting clobbered there too with interest rate increases.
I don't see why an Obama-Care model couldn't be applied to the auto and home insurance markets. Govt. oversight of health insurance companies didn't lead to a massive implosion of the system like the Repukes predicted --- Obama-Care did exactly what it promised --- kept insurance costs under control and making it more affordable for the lower and middle class folks. I have yet to see any doctor, hospital or insurance company go bankrupt because of Obama-Care.
It’s more about how the insurance companies act like a government agency and levy what should rightfully be called a tax on every single goods sold, mile driven, wage earned , and paid aid by small businesses often mandated by law, in every single location in this country.
Because it fucked up the individual insurance market, that why it can't. It didn't add nearly as many new insured as the figures indicate. Many of them came from employed people who switched to get the subsidies and early retirees who stopped working and voluntarily reduced their reportable income to get subsidized insurance and sit on the beach. The remaining came from the enhanced Medicaid.
Meanwhile, there were millions of people already in the individual insurance market who were forced out. The Obamacare insurance is generally only affordable if you qualify for the government subsidies - those who didn't were hammered.
I bought insurance on the individual market in 2002 because I was self-employed and was having GI problems. Got the standard workup like colonoscopy and other tests, and then promptly got the "denied coverage because of pre-existing condition" letter. Had to pay everything out-of-pocket. Fast forward 20 years and my monthly premiums are the same as I paid in 2002 (adjusted for inflation) and I got a FREE screening colonoscopy because I just turned 50.
So yes, Obama-Care delivered on it's promise and all the shady insurance companies had to get out of the market because they couldn't keep ripping off customers by collecting hefty premiums and sending out coverage denial letters en masse.
In 2014, right before all the new mandates kicked in, I paid $1,100 per month for a plan that covered almost everything, was accepted pretty much everywhere and waived the deductibles on everything except hospital visits. The catch was that it did not cover mental health services or maternity care, which was fine by us since we were done having kids and were not seeking mental health services.
A year later, when the mandates kicked in, that policy was discontinued. The new policy I got was $300 per month more expensive with the deductibles applying to almost everything. The worst part though is that we learned that almost nobody wanted to accept the new policy, so we had to switch our PCPs. If I wanted a policy as good as what I had, it would have been closer to $1,700 a month.
Fast forward to 2022, I pay about $2,500 per month for something close (but not completely) to as good as what I had in 2014. That's 127% premium increase over 8 years. Worse though, my deductibles and copays are higher and apply to more services, so my total healthcare spending has gone up even more than that.
So stop saying stupid shit when you don't really know what you're talking about. For every action there is a reaction. When you force mandates into every policy, they will get more expensive. When you construct a model that is premised upon one class of people subsidizing another, the folks doing the subsidizing will pay more. For every action, there is a reaction.
1. Half of all cost is in the last year of life. Most every other country imposes limits on what is done for someone when they are clearly terminal but trying to add a few more months of life.
2. Cutting edge procedures and equipment are available to everyone. Twist your leg ? Get a $1,000 MRI.
3. We subsidize drug research for the rest of the world.
Any politician who votes for sensible limits on health care would be guaranteed to lose the next election.
And the hits keep coming!! I told you so.
The producer price index rose 0.2% in October, below the 0.4% estimate.
A significant contributor to the slowdown in wholesale inflation was a 0.1% decline in services, the first outright decline in that measure since November 2020.
On a year-over-year basis, PPI rose 8% compared to an 8.4% increase in September.
In other economic news, the Empire State Manufacturing Survey for November registered a reading of 4.5%, much better than the estimate for a -6% reading
Majority of those 10K employees are in R&D divisions like Alexa. Not a single distribution center employee will be laid off, and Amazon desperately needs more help for the holiday shopping crush.
2023 will be nothing more than a "softening" and not a recession. Inflation is coming down, gas prices are at near-normal prices, and consumer spending is ticking back up. Walmart just posted higher-than-expected earnings. Things are looking up, thanks President Joe!
The labor market is still extremely tight; diesel fuel prices are soaring; and energy rates are still exceedingly high. Until we bleed enough demand out of the economy to ease pressures in these areas, inflation will persist at some uncomfortable level. Instead recent spending reports show few signs of this slowing down.
History has taught us, both here and abroad, that what we need to break the back of inflation is a good ol' fashion recession - a serious slowdown in economic activity. In other words, a dollop of pain now to avoid never-ending price pressures for years to come.
I think the Fed actually understands this, but simply doesn't have the stomach for it. No doubt promises were made in order to secure Powell's re-nomination, which undoubtedly include a commitment not to firebomb the economy until the next Presidential election. Or maybe the expectation was unspoken, idk, but it's pretty clear that Powell is not feeling much sense of urgency in getting inflation under control. he's doing just enough to take the edge off, but not enough to tame it.
But hey now little fella, I won't hold it against you. Handi-capable people are people too. But if you want to keep arguing these points, you might want to keep up with the rest of the class. Like the special needs kids who are given extra time to complete their assignments, you too should take all the time you need to process what has been posted. 😉
To repeat: The labor market is still extremely tight; diesel fuel prices are soaring; and energy rates are still exceedingly high. IMHO until we bleed enough demand out of the economy to ease pressures in these areas, inflation will persist at some uncomfortable level. Indeed recent spending reports show few signs of this slowing down.
As far as your contention about what the Fed has never done, they have actually jammed rates up by much larger amounts in single meetings than they have collectively in these little tip toe 75 bp bumps. You just have to go back to the 70s and early 80s to see it, the last time we had inflation this bad.
If you want to argue about why the lessons of the 70s and early 80s are not applicable today, or why those forward looking indicators are less meaningful than they have historically been, then by all means do so. But less noise and spin and nonsense and more on point rebuttals would be a nice start.
Again though, take all the time you need...😁
The latest rally in U.S. stocks following signs of cooling inflation isn’t likely sustainable, warned Scott Wren, senior global market strategist at the Wells Fargo Investment Institute.
Instead, Wren sees a lot hanging on a few signs that inflation may be starting to fade, triggering yet another bullish upswing for stocks on expectations that the Federal Reserve will “pivot,” or pause its interest-rate hikes.
“We have seen this happen numerous times over the last few months as economic data has been released,” Wren wrote in a Wednesday client note. But his team said they suspect that if the October consumer-price index “had come in two-tenths (or even one-tenth) above the consensus estimate,” the market response might not have been “as pretty.”
The S&P 500 index SPX was trading lower on Wednesday, but still up about 6% from a week ago, according to FactSet data. Looking through a longer lens showed a 10.6% increase
Again Dugan, if you were paying attention, for which you lack on filling up your bottomless pit of a hole, you’d see that as a remedial student you’d recall this round isn’t anywhere near the decades long 70’-80’s style that you pretend to state with conviction is happening, although be it quite stupidly. I need no time to know what I am talking about, as you “think” you know what you’re speaking about. Somehow you’ve flown over the cuckoos nest as a legitimate person knowledgeable of qualified investment experiences. May I remind you how you were advising on this board for everyone to purchase RICK’s, not sure of the ticker symbol, about 10 years ago. An epic failure of a stock pick! But that’s ok Rickyboi, you can go to bed tonight “thinking” you’ve got this right as I remind you during the upcoming months how big of a faggit you are, being slam dunked just like Dougster used to do to you back in the day. Sleep like a baby so you’re not so grumpy when November readings come out Dec 10th-13th. All I “know” is that I’ve never pushed a stupid stock like RICK’s and doubled down on a losing pick like the kind of stock picker you are. Nice credibility you for their boi! I’m glad you “think” you know what you’re talking about, so at least you got that going for you, because perception is reality in your world.
https://apple.news/Abu0rqyFASHCfVPWFdKbA…
Wharton professor Jeremy Siegel expects 2023 to be a strong year for equities as the Federal Reserve finally acknowledges that inflation is easing.
He expects the stock market to surge at least 15% and as much as 20% next year, which would send the S&P 500 back to 4,740 based on current levels, near record highs not seen since the start of this year.
"I think basically 90% of our inflation is gone," Siegel told CNBC in an interview on Monday, explaining that on-the-ground inflation, especially in the housing market, is declining at a considerable rate despite lagging indicators relied on by the Fed showing the exact opposite.
"My point has been housing has declined but the way the government computes it is so lagged that it will continue to show increases. And I think finally the Fed will say, 'you know what, on the ground things are all declining and we got to think about that,'" he said.
Siegel expects the Fed to soon pivot away from its aggressive rate hiking path, explaining that the Fed will likely raise rates by only 50 basis points at its December FOMC meeting. The Fed has increased interest rates by 75 basis points at its last four meetings.
But what will be more important for investors to focus on at the December FOMC meeting is the statement from Fed Chairman Jerome Powell, which should, according to Siegel, include a "real strong hint" of an upcoming pause in further Fed tightening policies.
"They need to pause to see what actually is going to happen. That would really spark a big rally. But even a strong statement that we have seen good signs about inflation and that most of our [rate] increases are behind us I think could spark a December rally. If not then, it will come in January," he added.
In regards to a recent note from Goldman Sachs that said the stock market will likely end flat in 2023, Siegel said, "I think they're being way too pessimistic... I think the market is undervalued."
"It's taken way too long for the Fed to get it and they haven't gotten it yet that inflation is basically over, but they will, and I think they're going to get it maybe very late this year or early next year. And I think as soon as they get it you're going to see a big increase in equity prices," he said.
No? Then why are we talking about inflation being gone?
It may slow down a bit in certain sectors. It did so at times in the 70s too in response to Fed actions. But it always reared its ugly head again when the Fed took its foot off the gas. Until we do enough to stamp out the underlying conditions causing the inflation, it will continue to simmer under the surface, popping up in response to the slightest challenge.
But with that said, I don't necessarily completely disagree with that attention whore Siegel. But the market is not actually betting that inflation will be gone - it is betting that it will be tolerable enough that the Fed will use it as an excuse to act like the pussies that they are. They have no appetite for doing anything to truly stamp it out. We'll probably be dealing with this for years to come, at least through the next Presidential election.
https://stocks.apple.com/ADlHE_7AeR66G4l…
Have the labor markets loosened? Has the federal government stopped pouring shitloads of money into the economy (like through the Infrastructure bill that is finally just disbursing into the private sector)? Have people spent down their pandemic savings? Have we stopped paying people NOT to work via Obamacare and food stamp transfers?
No? Then why are we talking about inflation being gone?
It may slow down a bit in certain sectors. It did so at times in the 70s too in response to Fed actions. But it always reared its ugly head again when the Fed took its foot off the gas. Until we do enough to stamp out the underlying conditions causing the inflation, it will continue to simmer under the surface, popping up in response to the slightest challenge.
Inflation will only continue if the global supply chains are strained and the U.S. unemployment remains below 3%.
You don't need to take 20 credits of college economics to understand what is going on. Supplies of everything, from food to luxury goods, are in short supply and everyone has a job with wages going up every year, so that means higher prices for less goods with higher demand.
Jeez, stop spreading right wing bullshit about "Biden flooding too much money into the system" and just look at the basic facts.
Don't label something as "right wing bullshit" just because you're unable to comprehend it - or are too ignorant due to a lack of decent sources.. The simple fact is that we are still spending gushers of money, not only at the Federal level but the states as well, including goodie checks recently issued by a number of state governments. We are also still making it easy for people to stay out of the workforce via healthcare and EBT transfer payments.
If you continue to shovel money into the economy, people will spend it, driving up demand for goods and services and thereby prices. If you continue to make it easy for early retirees and other to sit on the sidelines, some will do so. KISS - Keep It Simple Stupid.
https://www.independentsentinel.com/pend…
Fed efforts to fight inflation is pushing us into a serious recession. Either they keep doing it and the recession will worsen or they will pivot away from interest rate hikes and inflation will worsen.
And yes, IMHO nothing short of a good ol' fashion recession is going to break the back of this inflation. But I don't believe that this Fed has the stones to do what it takes. The second the unemployment number hits 5%, at which point I agree with 25 that we will enter into a mild recession, the Fed will chicken out. I suspect that we will be stuck with a certain level of inflation until the next Administration or until these gutless wonders are finally cleared out.
Joe Biden would be proud of that stupid fucking comment. To the extent that some companies are experiencing increased profits now, and that's far from universal, it is a by-product of increasing prices to buffer against higher input costs in the near future that they cannot forecast. Energy is far more expensive than it was a year ago and labor costs are jumping monthly. Companies do not control market forces. They know that there are only certain windows in which they can raise prices and so much that they can raise them. If they screw it up, people stop buying their shit and/or they don't make money.
Because price controls don't work. They haven't worked in any economy ever over any period. Air moves to whatever part of the balloon is not being squeezed. Same holds true with investment capital. When price controls exist on something, producers make less of it and focus on more profitable items instead, resulting in shortages. Producers also don't spend on R&D and other development activities when they cannot earn their money back. Their is no such thing as a free lunch youngster.
The biggest problem with some young voters it would seem is a lack of attention span. Too many of them can only focus for long enough to absorb their favorite source's melodramatic tidbits and are incapable of forming their own educated opinions. It doesn't help that too many boys now are raised like whiny fucking girls, reacting first and questioning later if at all.
They have fucked up CA and IL with financial burdens that will eventually make these states insolvent and fucked up the education systems and finances of too many large cities to count. When handed the federal reigns, they inevitably fuck things up too at the national level - case in point the never-ending inflation situation. They just can't help themselves. The last Dem President that didn't cause serious damage to the economy with bad regulatory and legislative policies was Clinton.
I think we need a mandatory retirement age for politicians, and I don't think any politician should serve more than two terms, across the board. I also think we need an independent Federal Reserve and economic policy should be made completely non-partisan, they need to be elected based on their credentials, nothing else, and the politicos shouldn't be appointing or have any input into the workings of the Fed, same with the judiciary, also they should be elected on their credentials only and not appointed for life, two six year terms should be sufficient, and they also should be subject to an age limit. There is an awful lot that should be changed that would avoid the situation we are involved in now, and would do a tremendous amount to resolve the partisan mess we are embroiled in now.
Biden, being a Democrat, would be likely to say inflation is caused by greedy corporations. He would eventually call for price controls as inflation rises. That would be followed by shortages and then rationing. Black markets would develop, and the federal government would hire swarms of new federal agents to crack down on the black markets. Every government intervention requires another government intervention to deal with the negative effects of the previous government intervention. Having gone through the government schools, most voters are economic illiterates and will support all this.
Well this flies in the face of Rickyboy’s jobs and employment narrative. Keep in mind that wages have only risen 5% in the past year, well below the rate of inflation. Told you so! Here’s how the article is printed with even data from ADP and BLS, wow a little research thrown in, too. Weeeee!!
The big story of the week was the +263K jump in Nonfarm Payrolls, somewhat higher than the street estimate of 200K, now causing some pundits to say that a “soft landing” is now likely for the economy. Unfortunately, the headline number is quite misleading.
The Payroll Survey is a survey of larger businesses and counts jobs, while the Household Survey counts those who are employed. A person with two part-time jobs shows up as “employed” in the Household Survey (i.e., counts as one), but as two in the Payroll Survey.
The Household Survey results for November were -138K on top of -328K in October and the number of people employed was nearly identical to the number produced way back in March. We haven’t seen back-to-back declines in this survey since the lockdowns in 2020. In addition, since the Payroll Survey says the number of jobs are rising, but it isn’t showing up as more employment in the Household Survey, the rise in the job counts in the Payroll Survey must be mainly part-time. This is verified in the Household Survey by the expansion of +165K of those working more than one job.
The contraction of Hours Worked is another sign that part-time jobs have been the growth engine. In November, the workweek contracted -0.3% and, at 34.4 hours, is at the lowest level since the April 2020 lockdowns. According to Economist David Rosenberg, the workweek contraction is equivalent to a -380K job loss. Furthermore, overtime hours fell -3.1% in November, yet another negative sign.
Employment in the Retail sector fell -30K in November and is down -62K since September. One wouldn’t see this if retailers were expecting a solid holiday shopping season.
In the ADP report, employment only rose +127K. Of interest, small business (<50 employees) and large businesses (>500 employees) showed up as shedding jobs (-51K and -68K respectively), and we’ve noted in past blogs the large and rapid layoffs in the tech sector. It was mid-sized companies (50-499 employees) that added (+283K).
The Unemployment Rate (U3) is calculated from the Household Survey. Because that survey has shown up negative for the past two months, one would expect the unemployment rate to have risen. But, it hasn’t, staying at 3.7% for both October and November. That’s because the labor force participation rate fell for the third month in a row (i.e., the labor force shrank; so, while the numerator, employment, was lower, so was the denominator, the labor force). This isn’t healthy.
Of concern for the Fed is the jump of 0.6% in average hourly earnings, double the market expectation and up 5.1% Y/Y (vs. 4.9% in October). Had hours worked not contracted, the average hourly earnings number would have been under the +0.3% street estimate. We don’t expect the labor force to continue to contract, so going forward, this is going to moderate. Nevertheless, this will likely give the hawks at the Fed additional ammo.
The reason we think that the hourly earnings will come back in line comes from the latest October JOLTS (Job Openings and Labor Turnover Survey) where layoffs rose +58K (up in two of the last three months), new hires fell -84K in October -238K in September, and -820K over the last eight months, and quits were down -34K in October, -124K in September and down by -403K over the last seven months. So, going forward, we expect wage growth to fall to the 3% level.
This flies in the face of those grinches SkiDumb and Rickyboi, 2 of the biggest ass clowns this site has ever accompanied!
The November inflation data, which showed consumer prices rising less than expected for a second straight month, “increases the likelihood that we could get a dovish surprise” from new policymaker projections showing rates rising only another half percentage point by the end of 2023, Krishna Guha, vice chair of Evercore ISI, wrote ahead of the policy decision. Guha, however, said he still expects Fed policymakers’ median rate projection to narrowly favor a higher endpoint in a range from 5% to 5.25%.
Somehow SkiDumb will turn this around to some sort of left wing agenda. What an emotionally triggered old man! Anyway, keep your eyes out for another solid 12 months of “I told you so” from me for anyone who dares to refute my accurate predictions on inflation.
Have the labor markets loosened? Has the federal government stopped pouring shitloads of money into the economy (like through the Infrastructure bill that is finally just disbursing into the private sector)? Have people spent down their pandemic savings? Have we stopped paying people NOT to work via Obamacare and food stamp transfers?
No? Then why are we talking about inflation being gone?
It may slow down a bit in certain sectors. It did so at times in the 70s too in response to Fed actions. But it always reared its ugly head again when the Fed took its foot off the gas. Until we do enough to stamp out the underlying conditions causing the inflation, it will continue to simmer under the surface, popping up in response to the slightest challenge.
Now I am starting to see why Icee calls SkiDumb, SkiBitch. Because he is a whiny little old Pussy!! Food inflation is going to start to flatten or come down due to the drop in energy/fuel. I’m goin to start searching for summer flights because diesel fuel has dropped, too. Of course Rickyboi can refute that all he wants, as he is a one note trick like his butt buddy SkiDumb. One note, one trick ponies. Lol!
FYI: there no longer is inflation. I told you so!
For those who’d like to learn about the reality of economics instead of seeing a whiny bold pussy like SkiDumb retort from looking at his clients statements for economic clues, the article linked shows the largest drop in diesel fuel since the Lehman Brothers collapse……..
Drop in benchmark DOE/EIA diesel price is 2nd-biggest ever
Decline of 21.3 cents almost matches number from post-Lehman Brothers market in 2008
John Kingston John Kingston
2 days ago
The benchmark DOE/EIA price fell by the second-largest amount in its history Monday. (Photo: Jim Allen/FreightWaves).
The second-biggest decline in the benchmark weekly diesel price from the Department of Energy took the number down 21.3 cents per gallon, to $4.754.
A decline of that magnitude has only been exceeded once in the almost 29-year history of the DOE’s Energy Information Administration publishing a weekly average retail diesel price. That occurred in October 2008, when the collapse a month earlier of Lehman Brothers was roiling global markets, kicking off the global financial crisis. The price fell 21.6 cents for the number posted Oct. 13 of that year.
This week’s price is the lowest since March 7 of this year. Since the recent high price set on Oct. 24, the DOE/EIA diesel price is down 58.4 cents a gallon.
Retail prices inevitably lag changes in futures and wholesale prices, but the lag on the current steep drop has been historic. Even with the recent drop in retail prices, the FUELS.USA data series in SONAR has continued to rise. FUELS.USA measures the spread between the average retail price and the average wholesale price and historically has been near $1-$1.10 a gallon. A week ago it was at about $1.91 a gallon. Today, it came in at $2.18.
The ultra low sulfur diesel (ULSD) price on the CME commodity exchange between Nov. 3 and last Friday fell about $1.20 a gallon. However, on Monday it climbed 17.21 cents, its biggest one-day gain since early October. After settling Thursday at $2.7937 a gallon, the price rose Monday to $2.9658.
Recent declines in the price of ULSD on the CME have been fueled by a combination of declining demand and growing inventories.
The weekly EIA report contains demand data called Product Supplied. It does not break out diesel, but a category called distillate, based on consumption patterns, is about 85% to 90% ULSD. Product supplied for distillate was 4.257 million barrels a day in the week ending Oct. 28. In the week ending Dec. 2, the most recent report available, it was down to 3.55 million barrels a day.
Inventories, a key factor in driving the price above $5 at the pump just a few weeks and months ago, have recovered on the back not only of decreased demand but also refinery operations ramping up to take advantage of strong diesel prices. Stocks of ULSD stood at 95.8 million barrels in that week ending Oct. 28. They rose to just under 108 million barrels in the most recent weekly EIA report.
That in turn has been helped by blistering U.S. refinery operating rates of just over 95% in the two weeks ending Dec. 2, according to EIA data.
Ironically, the big drop in the EIA price, used as the benchmark for most diesel surcharges, was announced on the day that markets took a big upward move after its recent declines.
Two key factors helped push the price up by 17.21 cents a gallon Monday, to a settlement of $2.9658 a gallon. First, the Keystone Pipeline (which has been operating for years, not to be confused with its better-known sister pipeline, the Keystone XL, whose construction has been blocked by the Biden administration) has suffered a significant leak and shut down.
The pipeline carries 610,000 barrels a day. The leak is in northeast Kansas and its size is considered significant.
While crude can be rerouted off a pipeline and on to rail cars, that process takes time and the shutdown may impact supplies to refineries. Like the Keystone XL was supposed to do, Keystone takes crude from Canada and some from production in the U.S. and brings it to the U.S. Midcontinent where it can also be sent on to the U.S. Gulf Coast refining system.
Cold weather is another factor and ULSD on Monday rose more than the increase in crude. The 17.21-cent jump in ULSD Monday was a 6.16% increase. But crude benchmarks were up just between 2.15% and 2.5%.
The market reaction to forecasts of more cold winter weather could also be seen in the settlement price of natural gas at the Louisiana Henry Hub delivery point. Natural gas climbed 34.2 cents per thousand cubic feet Monday, an increase of 5.19%.
FYI: I told you so!!
[Copied and pasted from above yet again for people too slow to process it the first three times, lol]
Have the labor markets loosened? Has the federal government stopped pouring shitloads of money into the economy (like through the Infrastructure bill that is finally just disbursing into the private sector)? Have people spent down their pandemic savings? Have we stopped paying people NOT to work via Obamacare and food stamp transfers?
No? Then why are we talking about inflation being gone?
It may slow down a bit in certain sectors. It did so at times in the 70s too in response to Fed actions. But it always reared its ugly head again when the Fed took its foot off the gas. Until we do enough to stamp out the underlying conditions causing the inflation, it will continue to simmer under the surface, popping up in response to the slightest challenge. Until we solve the labor market issues that are driving continued wage growth, serious long-term reductions in inflation are unlikely.
This flies in the face of Rickyboy’s jobs narrative(see jobs article from above too). Any way, inflation is over and I told you so! Jobs are tumbling…..
Reuters) -Goldman Sachs Group Inc will lay off up to 4,000 people as the Wall Street bank struggles to meet profitability targets, news platform Semafor reported on Friday, citing people familiar with the matter.
Managers across the firm have been asked to identify low performers for what could be a cut of up to 8% to its workforce early next year, the people said, with some cautioning that no final list has been drawn up, according to the report.
Goldman Sachs did not immediately respond to a Reuters request for comment.
The bank said in September it was planning to cut jobs, after pausing the annual practice for two years during the pandemic, a source familiar with the matter told Reuters at the time.
Goldman’s headcount swelled to over 49,000 at the end of September, up 14% from a year earlier. The investment bank had first warned in July it might slow hiring and cut expenses.
I remember in the summer I said inflation has peaked. Looks like I was right, again!!
SkiDumb swims in the waters of stupidity. Pool-pond, pond is good for SkiDumb. Lol. Learn to read ritard!!
Wow the hits keep coming to inflation making SkiDumb and Tricky Rickyboi looking even stupider as the months roll by, because Housing is going down and the jobs reports aren’t that strong when it is accurately reporting for the household formations. The Scrooges have paused just in time for Christmas! Feds may have to
Pause or slow their rate hikes due to slowing economy.
Today’s PCE coming in around 3% annual adjusted for the last quarter over quarter tracking. Nice!https://www.investors.com/news/economy/f…
The PCE (personal consumption expenditures) price index rose 0.1% on the month. The PCE inflation rate continued to ease from June's 40-year high of 7%, slipping to 5.5%. Core prices, minus food and energy, rose 0.2% on the month as the annual core inflation rate eased to 4.7%.
Wall Street had expected a 0.2% increase in the PCE price index and a 0.2%, with an overall 5.5% inflation rate and 4.6% core rate.
Powell Shifts Goalposts With New Key Inflation Rate
Powell's favorite new inflation rate happens to be the most problematic one for the S&P 500. The gauge factors out goods inflation, which is rapidly falling. It also excludes housing inflation, which appears set to fall in 2023 as government data catches up to the stalling growth of market rents.
That leaves only core services other than housing, such as health care, education, hospitality and haircuts. Because price changes for such services are closely linked to wage growth, they provide the best signal of where core inflation is heading, Powell said.
@Mate: Momentary dips do not signal inflation busting - just momentary dips. The last time we had inflation this high, in the 70s, wage inflation was the number one driver of price inflation over time. Until we solve the labor market issues, we will not have a permanent solution to the inflation problem.
Have the labor markets loosened? Has the federal government stopped pouring shitloads of money into the economy (like through the Infrastructure bill that is finally just disbursing into the private sector)? Have people spent down their pandemic savings? Have we stopped paying people NOT to work via Obamacare and food stamp transfers?
No? Then why are we talking about inflation being gone?
It may slow down a bit in certain sectors. It did so at times in the 70s too in response to Fed actions. But it always reared its ugly head again when the Fed took its foot off the gas. Until we do enough to stamp out the underlying conditions causing the inflation, it will continue to simmer under the surface, popping up in response to the slightest challenge. Until we solve the labor market issues that are driving continued wage growth, serious long-term reductions in inflation are unlikely.
As best I can tell, Mate has predicted lower inflation in the not-too-distant future. That’s a pretty safe bet. If inflation drops to 4%-6% sometime in 2023 ( or maybe even 2024 ), he has the wiggle room to declare he was right.
Now, if he had predicted 2% inflation within 3 months, that would have been a BHAG ( Big, hairy,audacious goal ),
Can we all accept inflation will be lower within a year or two ?
“A recent string of errors and apparent discrepancies in federal statistics has raised concerns that such metrics, long regarded as irreproachably nonpartisan and credible, may have fallen prey to manipulation in favor of the incumbent Democratic Party.
The three most glaring recent examples of such statistical misfires are:
the Bureau of Labor Statistics' reported overestimate of second quarter job growth by a sizable margin;
the Census Bureau's population overcounts of blue states and undercounts of red states — in a reapportionment year;
the apparent disappearance of 50,000 asylum applications from the Executive Office for Immigration Review (EOIR).“
The food stamp and obamacare programs you mention, were already present before when interest rates were lower. So all else equal, raising interest rates means there is less inflation, or more deflation compared to before.
Also some economists have stated a small amount of inflation is fine its done alongside population growth and technological advancements.
And btw socialized programs have nothing to do with inflation, inflation is caused by printing money or increasing the money supply. A socialized program would take money away from one person to give to another person so inflation would net-net be the same if the money supply is the same.
Would recommend checking out some of the academic (not sponsored academic) chatter on the topics if you have a genuine interest.
The hedge-fund portfolio manager, who shot to fame thanks to Michael Lewis’s “Big Short,” expects the dynamics driving the next inflationary wave will be similar to the previous one: the Federal Reserve will slash interest rates while the Federal Government doles out stimulus in response to a recession that’s expected to begin later this year.
https://apple.news/AOEbgFfdLT5OyJhzhPec_…
Right now there’s a gap between where the bond market says interest rates are heading, and where Federal Reserve officials say they’re going—and the so-called bond king says investors should put their faith in markets.
“My 40 plus years of experience in finance strongly recommends that investors should look at what the market says over what the Fed says,” said Jeffrey Gundlach, the DoubleLine Capital chief executive and chief investment officer, in a webcast Tuesday, according to Bloomberg.
Markets are expecting interest rates to be cut by the end of the year, down to 4.5%, while Fed officials see rates holding above 5%.
One slide from Gundlach’s presentation recommended investors swap out the federal funds rate with the 2-year Treasury.
Minneapolis Fed President Neel Kashkari told the New York Times in an interview published this week that the central bank will be proved right. “I’ve spent enough time around Wall Street to know that they are culturally, institutionally, optimistic,” Kashkari said. “They are going to lose the game of chicken, I can tell you that,” he said.
Gundlach, as he’s been saying recently, made the case both for bonds as well as international stocks, according to a separate writeup from CNBC.
He also pointed out the ratio of copper to gold now sits below the yield on the 10-year Treasury—usually that ratio tracks the benchmark
Again, if you could read it is a Barton’s article, ignoramous!
Obviously. That’s like patting yourself on the back for correctly predicting the sun will rise in the East.
What’s the point of this thread ? To state the obvious as though it took a master intellect to discover it ?
Sans my original call last summer in predicting the actual peak!! You all should really be paying me to keep you up to date on reality. Again, you’re welcome.
M2 supply drops over 5% since my call last summer, justifying calls of “I told you so”!
CPI only rising 3.38% since September of ‘22, as that is the new variable rate for inflation bonds to be declared starting May 1 ‘23. The hits keep on coming! You’re welcome, by the way.