Inquiring minds are looking at today’s Consumer Price report for signs of inflation.
CPI Highlights
- The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in September on a seasonally adjusted basis after rising 0.1 percent in August.
- Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.
- Increases in the indexes for shelter and food were offset by declines in the indexes for energy and used cars and trucks to result in the seasonally adjusted all items index being flat.
- The energy index fell 1.4 percent as the gasoline index declined 2.4 percent. The food index increased 0.1 percent in September after being unchanged in each of the prior 3 months.
- The index for all items less food and energy rose 0.1 percent in September after increasing 0.3 percent in each of the last 3 months. Along with the shelter index, the indexes for medical care, household furnishings and operations, and motor vehicle insurance all rose in September.
- The indexes for used cars and trucks, apparel, new vehicles, and communication all declined.
- The food index increased 1.8 percent over the last year, while the energy index decreased 4.8 percent.
CPI Month-Over-Month and Year-Over-Year
In Search of Inflation
Anyone buying their own health care insurance or electing to to have any will look at that alleged 4.4% rise and think it’s a joke.
CPI vs Medical Services and OER Year-Over-Year
Owners Equivalent Rent (OER) is another problem area. Since 2012, rental prices have risen much faster than the CPI.
The cost of medical services nearly always rises faster the the CPI.
Families Suffering Despite Alleged Low Inflation
Employer Healthcare Costs Jump to $20,000 – Not Inflation?
Please note the average Employer Healthcare Costs Jumped to $20,000.
Uninsured Rate Jumps
On September 16, I reported the Percentage of Healthcare Uninsured Jumps From 8.0% in 2017 to 9.1% in 2019.
68% of Millennial Homeowners Regret Buying a Home
The BLS does not consider the price of housing as a consumer price, only rent.
Rent is outstripping wages and the price of houses even more so.
As noted in American Dream, 68% of Millennial Homeowners Regret Buying a Home.
Inflation Magic
Low inflation is imaginary for those buying their own health insurance, for those looking to buy a home, for those in college, and many others, too.
And of course the BLS does not count economic bubbles and the Fed does not even see them
Mike “Mish” Shedlock
Finally, I am pleased to have a global readership.
The title of this blog used to be Global Economic Analysis
Not US economic analysis
I don’t write for foreigners
I write what is important or what I find interesting
People are free to find other sites more to their liking.
“Poors getting to you Bob? By the way Mish, why is there no option to down vote repugnant posts at this site?”
I will put in a request
Was on the road most of the day
Make sure you take care of the overwhelming number of foreigners you write for Mish. According to Alexa, 54% of your site traffic comes from abroad, with India and Pakistan making up the two biggest non-US counties
Check out the geographic stats:
Visitors by Country
Dear Country Bob
I write what I damn well please
And I don’t care what people think. You are free to read ZH or anyone else that offers better coverage of what you want.
IMO – Brexit is import. So is US politics. Realist was bitching about my post on Warren.
Shheseh is that not important?
If I was after clicks I would write about Trump every day.
I happen to think the Global economy is important and collectively, the EU is nearly as big as the US.
But if you don’t like this site, find another.
Try ZH.
Yep, a button to use on those, like me and@[Country Bob] , who have social “issues”.
Thank you for your attention.
Health care is cheap, sick care is very expensive. Here in Colorado they are building thousands of apartments within walking distance of every Light Rail station. It looks like over building to me, like in the 80s during our oil boom. Population in-flow and the millineals may sustain it now because there are no houses for sale.
Owners equivalent rents is a large bedrock part of the wealth inequality we see now, it is a bogus plug number that is tailored every year to Fed and Fiscal policy and does not reflect the costs of shelter or housing at all. It is a small phone survey done by calling home OWNERS and asking them if they had to rent a comparable residence in their town today what would they expect to pay.
Home OWNERS are not in the rental market, they do not know what housing costs to rent. That would be like going to a gay bar and asking the men there how much they believe baby formula costs.
I do know that my VA disability and SSD were just announced to have a 1.6% COLA adjustment for 2020, which means a raise of about $65 per month when I had a big rent increase in the current lease period, and will have another $100 per month increase starting January and I can’t pay it, there is NOTHING left to cut. Jesus, even gasoline has gone up 40 cents per gallon here since the attacks on Saudi Aramco even though RBOB leaving the refinery spiked by about 14 cents for a few days and is now back below $1.60 per gallon out the door (that includes federal gas tax by the way).
The Rich Really Do Pay Higher Taxes Than You
By any measure, the overall U.S. tax system is progressive.
By Michael R. Strain
October 10, 2019, 7:30 AM CDT
Bloomberg.com
After paying taxes, do they end up with the same amount of money as me?
If the Fed hands me, in exchange for nothing, a billion bucks; stolen by way of debasement from others; and I pay even 50% of that in nominal taxes, I still pay the government complex net negative $500 million.
The biggest chunk of income and wealth redistribution the government is involved in, is by now done by the Fed and regulations. By way of debasement and asset pumping.
Nominal taxes definitely play a role, but leaving the biggie, which by now is Fed and regulation riven wealth transfers, out of “who pays what” arguments; makes the whole exercise no more relevant than insisting your “diet” consisting of 5000 calories a day of bacon and donuts, is somehow working, because your dick looks like it shrank a bit overnight.
If CPI measured using same parameters prior to being changed in1996 reported inflation would be much higher. The numbers are deliberately understating true inflation. People are falling farther behind economically and don’t understand what the reason is. My theory is this is why socialist ideology and politics are becoming more prominent. Communism and socialism result often because the average person is being f”d over by corrupt govts. We fit the bill exactly.
Healthcare costs are limiting wage growth. These costs are a big portion of an employers cost of an employee. Most employees don’t know what is costs the employer.
Obamacare made an already bad system even worse. Everything the government gets involved in, gets worse and costs more.
I don’t know what the answer is and I don’t see viable alternatives
The success of Obamacare and medicare.
Medicare is already the largest payer in the USA…. when they actually get around to paying.
Medicare pays an average of 18 months after the fact if they pay, and they pay no interest for the delay. They deny payment based on arbitrary “rules” that no two bureaucrats agree on anyway.
Private insurance gets overcharged to make up for Medicare not paying — and the charges already have nothing to do with the actual cost of care
Stop making up lies about medicare. What is wrong with you?
Upfront transparent prices for services rendered a good place to start.
I’ve long felt that your statement is true, and it is absolutely possible in some areas like MRIs. However, I’ve befriended a doctor over the last few years and he scoffs at the notion. His argument being that no two patients are the same and sometimes diagnosing the same problem can be very different for different people as well as treating them. So its not like changing the oil in your car where you can have a set schedule of prices based upon known costs.
My response is to simply pay physicians by the hour. The insanely gamed billing schedules only obfuscate the price for the patient.
I go to my doctor about once a year. He can charge $500/hour to cover all his costs. He can charge me $250 for my 1/2 hour visit. I’ll happily pay. Even having a surgery with a surgeon, anesthesiologist and a couple of nurses can’t be that expensive. I’ll happily pay $3000 for an hours worth of their time. Between the two, $3500 out of pocket beats the heck out of $20,000.
He said he’d happily go by the hour, but insurance companies would never go for it. There entire industry is based on obfuscating prices.
“Healthcare costs are limiting wage growth.”
Well they might be limiting your wage growth, but are showing up in wage growth in the medical community.
Since health care and housing are two of the most basic components of almost any household’s spending, as long as those costs go up; demand for more discretionary products and services, hence their prices, will necessarily be artificially suppressed.
That’s primarily what this graph shows. Generously assuming it shows anything at all of relevance, that is.
The “success” of Obamacare
Why is childcare incredibly expensive yet employees are paid a pittance?
https://harpers.org/blog/2019/10/teacher-bright-horizons-daycare/
Rent/housing is grossly understated from any reasonable perspective. Health insurance has gone mad. My wife and I pay $15k for a 10K deductible HMO and I have heard worse stories. Tuition is also in the stratosphere. But you know, hedonic deflators and all. Your cell phone is cheaper, so it’s all good
Just my opinion, but, any kind of insurance is basically a scam preying on people’s fears (that they will need it) and their greed ( that they will somehow get more out than they are putting in). Unless you have some sort of preexisting condition, paying $15K for insurance with a $10K deductible in nuts. Way better to bank the money instead as a self-insurance policy. Speaking from experience, if you are ultra frugal, creative, and resourceful, there are plenty of ways to hack the medical industrial complex we call the “health care” industry in this country.
Of course the problem with that is that you can bank $15k per year for 20 years = $300k and have that and a million more wiped out by a single run in with our corporate for OBSCENE profit system. In his 50’s my stepfather was diagnosed with a terminal brain cancer, that was 1988, more than 9 years and $5 million later he died. You would never begin to believe what would be charged now for the same treatments, it is easily double to triple.
You can always self-fund health by doing maintenance, and be willing to die if you get something serious. However, you can’t think that way about your children. And that makes children unaffordable.
Too much of mishtalk’s traffic is coming from never-do-wells who don’t even live in the USA. Another large contingent are Canadian ex-pats living in the 3rd world sh!t hole known as San Fransisco.
None of these people have skin in the game. None of these people can fix there own sh!t holes — the Canadians in SF are there because they can’t get jobs back in Canada.
Mishtalk is more than 50% of the traffic on moneymaven.io … wonder if the advertisers know how many commenters don’t even live in a place where the advertiser’s products are sold
The ads depend on the location of the computer. When I’m in the USA, the ads are American. When I’m in Asia, the ads are in the local language.
Those of us outside of the United Shitholes of America do have skin in the game. I’m returning to the USA and have to decide whether to do without health insurance or do like compsult does and pay $15,000 for insurance with a $10,000 deductible.
To the credit of Canadians in San Francisco, at least they have jobs which is more than can be said for a lot of the homegrown talent.
Many Americans have no idea about the world outside of the US border. At best they “know” the world through TV propaganda or vacations in some Central American shithole.
Advertisers can see the IP address of every commenter, which means they can see the location too. And thanks to various tracking services, they usually know their spending habits too.
So what was the trigger today for this remark?
Guilty as charged, doubly so. Cdn moved to Europe, resided in the States several years … so what? It’s illuminating to read what people are saying in Russia, or Syria, or Hong Kong. Local dynamics often differ wildly by explanations proffered by international news services and MSM.
Im a kansas redneck with 2 paid off houses, multiple cars,a bit of $ invested, and injured in a bad accident 15 years ago that took me from $80k a year to less than $30k and trying to read up and educate myself trying to keep my own sliver of the pie from crumbling even more. I dont exactly fit your profile.
One out of five people who replied are from the USA…
I am like WHO GIVES A FUCK? Most Americans are obese and stupid, and thy are all corrupted by materialism that is disgusting. At least when they measure the value of a human being by their net worth they are worse than garbage. If the floaty chair fits ride it.
American obsessions with class, sex, ethnicity, and gate-keeping
Of the people who usually argue with me, the ratio of foreigners / Canadian ex-pats in San Fran… even higher
I don’t learn anything on mishtalk except why a lot of foreign countries don’t work. If you want to learn what NOT to do, then you are in the right place
Mish isn’t answering because he knows his audience. He writes a lot about the mess that is Brexit and the EU because that gets a lot of interest. His posts about Chicago get a lot of defensive comments from socialists who want the US to go the same way.
Living in / near Chicago for so long, I guess Mish developed more tolerance for their stupidity than others. He may have a really tough time adjusting to Utah, its not like Chicago at all
I greatly admire your attitude…and accomplishments. And unlike Country Bob, I virtually never come to this blog without learning something, but then, I’m a dumb shit; I know what I don’t know.
While this blog isn’t perfect, it’s one of the very few where the conversations are mostly civil. That’s nearly impossible to find these days and probably my biggest disappointment about how far the internet has fallen from its glory days back in the 90’s. Mish’s blog is also entertaining and since economics has so damn many variables, I’ve never come here without learning something. It’s the first blog I read in the morning. And for your tally Country Bob, put me down as a stateside American too. I’ve traveled in 43 countries, lived in several, and this will be the best one to watch the final fireworks from.
Poors getting to you Bob? By the way Mish, why is there no option to down vote repugnant posts at this site?
Two out of 11 people replying are in the USA (according to commenters).
According to Alexa website statistics, 46% of moneymaven.io traffic comes from the USA… meaning 54% aren’t even US citizens.
And the next two countries? For all the stories about Brexit and the EU? The next two most common countries for moneymaven.io readers are India and Pakistan!!! That must be some really worthwhile ad traffic!
And mishtalk is about 90% of moneymaven’s traffic, so the stats for the site are the stats for mishtalk.
Looks like I was being optimistic about how many US citizens are still here. No wonder the comments are overrun with socialists.
Its just Mish writing for foreigners
So, what’s your beef? Why do you care about the ad revenues? Do you think Mish attracts socialists? Strange conclusion. Are you engaged in the moral preening typical of Americans, and consider any foreigner socialist deplorables not worth engaging with? Then why spend any time at all in the comments section?
“Rent is outstripping wages and the price of houses even more so.”
…
Yes. And those who fail to realize that Housing Bubble.2 has germinated will be in for a rude awakening.
I don’t know about where the rest of you are, but gasoline is also outstripping wages. We were at $2.59.9 the morning Aramco was attacked and today we are at $3.29.9 for a seventy cent increase even as unleaded is leaving the refinery at $1.60 but this is a 27% increase in a matter of days. In the meanwhile they just announced the SS COLA for 2020, 1.6%. Fuck these people, our government is so corrupt it is as if they know we are going to be hit by a comet in 2029 and so why not screw all the people all they can while they can. I may have to go homeless, but I will still vote and I am not voting for any incumbents.
“The tariffs aren’t causing consumers to struggle.
Redbook yearly same store sales growth in the past 3 weeks.
August 24: 5.7%
August 31: 6.5%
September 7: 6.4%”
…
Yeah, well … that is … umm … one of those cherry picking facts (need I say more than Kudlow used same store sales to profess the consumer well earlier this year). Moneywise.com has 8500 stores closed / announced so far this year. Coresight Research pegs year end total potentially 12000.
When you subtract so many stores boost same store sales 2 ways. 1) Chains that close their “surviving” customers will shop elsewhere and boost THAT chain’s sales and 2) closing underperforming stores in still solvent chains will boost that chain’s same store sales.
Give me TOTAL sales … or don’t bother.
Another consideration, if inflation is FAR higher than they claim it is, and it is, then they can sell less items with fewer customers and yet still show improving sales, and that is the the same for any economic metric or report measured in dollars rather than units sold as you see with cars.