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CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

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Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#31

Post by Aurornis »

ACCount37 wrote: post #27
Aurornis wrote: post #11

Earlier quoted context omitted.

> The US may import a lot of things... but probably not shelter. Housing requires construction materials, tools, and fixtures. Tariffs increase the cost of all of these, including domestically produced materials due to the second order effects.

It also requires human labor, which isn't impacted by tariffs directly, but may be impacted by other government actions in the US. Such as the ongoing high profile crackdown on illegal immigrant labor.

Look at the actual deportation numbers. It’s barely on track to meet deportation rates from a decade ago.

Don’t believe the political rhetoric. They’re making a big show and behaving poorly with the masks and other abuses, but they’re not actually doing abnormally high deportations.

Note that any large country will have a steady flow of deportations due to basic enforcement of immigration laws.

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#32

Post by m101 »

12*0.4% is 4.8%

Inflation is running at an annualised 4.8%. The 2.9% number is backward looking.

Sure monthly inflation is more volatile, but the direction of travel is up, and that running average of 2.9% will be increasing slowly as it incorporates the recent higher prints.

Edit: the seasonally adjusted change is 0.4% actually, with the monthly change 0.3%

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#33

Post by baby-yoda »

Yoric wrote: post #18
shoo wrote: post #7

I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That said, it's curious that this CPI news release highlighted "shelter" as a driver: > The index for shelter rose 0.4 percent in August and was the largest factor in the all items monthly i…

There have been talks of collusion/price-fixing/monopoly abuse on rents in the US, with a single company (I don't remember the name) providing services (including picking prices) to a large majority of landlords. Could this be related?

The company accused of being involved in collusion is RealPage, they have a local market analytics platform which shares rental information between landlords.

https://www.justice.gov/archives/opa/pr/justice-department-s...

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#34

Post by coldpie »

tlogan wrote: post #10
shoo wrote: post #7

I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That said, it's curious that this CPI news release highlighted "shelter" as a driver: > The index for shelter rose 0.4 percent in August and was the largest factor in the all items monthly i…

My naive expectation was: - Rents would go down because deportation of illegals will reduce demand - Prices of goods would skyrocket because of tariffs But instead, rents went way up. Could this be driven by the push to return to the office?

> My naive expectation was:

> - Rents would go down because deportation of illegals will reduce demand

This was indeed extremely naive. There are not enough people in the US illegally to be a significant factor in housing demand. I'd suggest no longer getting information from whatever source lead you to believe this.

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#35

Post by jlongr »

m101 wrote: post #32

12*0.4% is 4.8% Inflation is running at an annualised 4.8%. The 2.9% number is backward looking. Sure monthly inflation is more volatile, but the direction of travel is up, and that running average of 2.9% will be increasing slowly as it incorporates the recent higher prints. Edit: the seasonally adjusted change is 0.4% actually, with the monthly change 0.3%

You concede that monthly inflation is volatile but then proceed to assume it is has grown uniformly and speculate that it will continue to grow uniformly? Umm...

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#36

Post by softwaredoug »

SR2Z wrote: post #26
esafak wrote: post #22

Earlier quoted context omitted.

Musk was vocally against the increased federal spending.

And yet he did not meaningfully reduce government spending with DOGE at all. He did pilfer a copy of the SSA database, though.

And managed to neuter agencies regulating his companies

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#37

Post by goalieca »

bix6 wrote: post #2

100% odds the Fed cuts but inflation seems entrenched. Will the cut really help pull the labor market up? Tourism is down, AI is up, etc.

The tech sector labor bubble started popping last year. I don’t think we’ve hit bottom yet. Stocks are at an all time high riding the AI bubble but I think that too will pop despite the soft landing certain tech leaders will hope for.

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#38

Post by baby-yoda »

bix6 wrote: post #2

100% odds the Fed cuts but inflation seems entrenched. Will the cut really help pull the labor market up? Tourism is down, AI is up, etc.

90% expected probability of a cut at the moment, down from 96% a week ago. A surprise no-cut would send a shock to the market IMO.

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#39

Post by jagraff »

ProjectArcturis wrote: post #30
shoo wrote: post #7

I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That said, it's curious that this CPI news release highlighted "shelter" as a driver: > The index for shelter rose 0.4 percent in August and was the largest factor in the all items monthly i…

House prices actually have nothing to do with CPI. "Shelter" is calculated using "Owners Equivalent Rent": https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...

I think, all things being equal, higher home prices should lead to higher rents, since at the margin people on the verge of buying a home would be more likely to choose to keep renting when prices are higher, thus increasing demand for rental units.

Re: CPI for all items rises 0.4% in August, 2.9% YoY; shelter and food up

#40

Post by skeezyboy »

Aurornis wrote: post #11
shoo wrote: post #7

I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That said, it's curious that this CPI news release highlighted "shelter" as a driver: > The index for shelter rose 0.4 percent in August and was the largest factor in the all items monthly i…

> The US may import a lot of things... but probably not shelter. Housing requires construction materials, tools, and fixtures. Tariffs increase the cost of all of these, including domestically produced materials due to the second order effects.

>Housing requires construction materials

ie wood

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