3.4% Year-Over-Year Coming Up
My expectation is primarily based on easy year-over-year comparisons plus smaller increases in some key indexes.
If the price of energy moderates, then things will likely turn lower.
Shelter, not energy, is the key component and I strongly disagree with the BLS methodology of using rent instead of home prices.
For discussion of what the CPI would look like if actual home prices were used, please see Hello Fed, Inflation is Rampant and Obvious, Why Can’t You See It?
Mish
June 17 of last year I went to Home Depot and priced three 14 foot 4X10 cypress beams to replace rotten ones under my lanai that hold up the living room roof rafter beams. Price = $406.31
Today I went to Home Depot to price the same thing since I finally found an engineer to come look at the problem. Three cypress beams 14 feet long 4X10 = $549.44 in spite of the fact that lumber production is at the highest point since the start of the GFC.
A lawn mower I looked at there late last year around Thanksgiving at $1,658 I finally had to break down and buy but now it was over $1,950. My homeowner’s insurance jumped 34% in April, no reason given, no storms, no claims, same owner same house. My auto insurance also went up 14% no claims, tickets, accidents, I am now paying 12 times as much per dollar value of car as when it was new 8 years ago. Then it was a $58,000 car and insurance was $660 per year. Now it is worth about $9,000 and I pay over $1,200 per year, clean record.
My cable/internet jumped from from $132 to $151 this month, no notice, no reason. Just a 14.39% increase and they will blame it costs associated with the pandemic. But over the last two years I had a total of 1.6% COLA increase because there is nearly no inflation. MY ASS! It is raging out of control as bad if not worse than when Carter was in office.
Every single thing I have to buy, all of it, from haircuts to pizza, all foods (when you can get them) are up nearly universally by double digits. More than a few things by triple digits.
We are in for a very rough ride and Mish, add a 1 in front of your prediction, even a two in front would be closer than your guess. House prices here are up 16% YOY, auto new and used are skyrocketing. Garden supplies are astronomical. For the first time in decades our normal medical inflation looks tame in this economy compared to everything else.
Can you or anyone here clue me in on the validity of the Chapwood Index??? He”d certainly agree with your experience.
If we own our house.
If we only drive 2000 miles per year.
If we are on Medicare.
How much inflation are we going to see?
Depends on what you spend your money on.
My house insurance for example just went up 50% (got the quote this week) here in Florida. So I’m calling around to see if I can find someone else or have them insure my home for less money.
I would imagine any services you need this coming year will cost more (plumber, electrician, mechanic, medical of any kind). Food clearly is going up, I won’t be surprised to see increases in cable/internet/cell phone service and so on.
Hence why I asked how much you spend per year and what you spend it on.
1. We had the 50% increase in homeowners’ insurance right after the nasty hailstorm of May 2017.
2. Supposedly, both CenturyLink (for internet access) and t-Mobile (for cell phone service) have fixed pricing forever.
3. We don’t have cable, but we are seeing price increases for streaming services.
4. Wine prices should actually decrease with the removal of Fat Donnie’s tariffs.
“Hello Fed, Inflation is Rampant and Obvious, Why Can’t You See It?”
They can’t see it because of narrative.
At some point the temporary forces keeping apparent rent inflation down will be unleashed and rent inflation will rise significantly as well.
And what would those “temporary forces” keeping rent in check be?
If the government starts subsidizing either directly or indirectly all the renters, then rents surely will rise. Present government’s current dilemma is how to subsidize just its voters. They are working on it though!
Great. I need to buy a sheet of cabinet grade birch plywood. No telling what that’s going for. Better buy it today before it goes up again…if I can find any.
I bought a tiny keelboat yesterday for the lake, a Victoria 18…for peanuts. It’s good to have unpopular hobbies nobody cares about anymore. The price of sailboats of all sizes just keeps falling…..but a rented slip to keep one in? That keeps going up, especially in Florida and on the West Coast. Not so bad here, as of yet….but high enough to keep me from keeping a boat down on the coast.
Yet Another Imperialist Occupation of Afghanistan Ends in Disaster link to craigmurray.org.uk
Latest U.S. proposal for ending Afghan conflict runs counter to Taliban beliefs
I think we continue to get crushe on insurance costs of all types. not something we typically talk about whe it comes to inflation. seeing that on flood and various types of insurance
Indeed. The Fed’s insistence on low interest rates has starved insurance companies for yield.
I just got my homeowners insurance quote in Florida and its going up by 50%!
Called my agent and told them to price alternatives and look at lowering the value they are insuring (saying my home went up 100K in the quote they are insuring me which is nice but I don’t want to insure for 100K more).
I suspect I’ll be lucky to just see a 25% increase 🙁
My auto premiums went up 14% in February, in April my homeowner’s policy went from $1,532 to $1,886 just 23% and no storms, no claims, no tickets or accidents. Just felt like giving themselves a raise and I am FORCED to pay it even though MY pay has risen by 1.6% in 2 years because there is no inflation.
Don’t hold your breath for a 3.4% increase in social security payments. Old people don’t count with the government. And 0 % interest on the money you worked for, too. ( Now about that new military budget …..).
They do every 4 years