SuperCore! SuperCore Inflation Rises For 49th Straight Month As Economic Surprise Data Collapses

Well, the Trump/Biden CNN Presidential debate was a disaster … for Biden. It was the worst debate performance I have even seen. Even worse was the “victory” party where Jill Biden treated President Biden like a little child being potty-trained and shreiked that all Trump does is L:IED. How strange since ALL Biden does is lie. But enough of this.

But how about SuperCore inflation?

The last month has seen US Macro data collapsing at its fastest rate in years…

Source: Bloomberg

…which, many believe, will also drag down inflation (and it has been)…

Source: Bloomberg

Today, we get to see The Fed’s favorite inflation indicator – Core PCE – which rose 0.1% MoM in May (after a revised +0.3% MoM for April) and in line with expectations. The headline PCE Price Index was unchanged MoM as expected as Durable Goods deflation trumped surging Services costs…

Source: Bloomberg

On a YoY basis, both headline and core PCE declined…

Source: Bloomberg

On a YoY basis, Durable Goods deflation is at its strongest in at least a decade…

Source: Bloomberg

More notably, the so-called SuperCore PCE rose 0.1% MoM, which saw YoY slow to 3.39%… which is awkwardly stagnant at elevated levels…

Source: Bloomberg

That is the 49th straight monthly rise in SuperCore prices with Healthcare costs soaring…

Source: Bloomberg

On a MoM basis, Income grew more than expected (+0.5% vs +0.2% exp) while spending rose less than expected (+0.2% MoM vs +0.3% exp)

Source: Bloomberg

Which accelerated both income and spending on a YoY basis (with the latter outpacing the former, of course)…

Source: Bloomberg

With wage pressures rising once again…

Government 8.5%, up from 8.4% but below the record high of 8.9%
Private 4.5% up from 4.2%

Source: Bloomberg

And after a series of revisions, the savings rate ticked up to 3.9% of DPI (from 3.7%) – the highest since January…

Source: Bloomberg

All of which takes place against a background of the sixth straight month of rising government handouts (well it is an election year after all)…

Source: Bloomberg

Finally, while acyclical inflationary pressures continue to drift lower, cyclical inflationary pressures remain extremely elevated…

Source: Bloomberg

A very mixed bag but nothing screams ‘automatic’ rate-cuts… and SuperCore refuses to budge.

Hey Big Spenders! 16 Nobel Prize-winning economists say Trump policies will fuel inflation (big spending gov’t +37.7%, US debt up 50% under Biden driving the economy, along with Federal Reserve)

Hey big spenders (Biden, Congress and the 16 Nobel prize winning economists).

June 25 (Reuters) – Sixteen Nobel prize-winning economists signed a letter on Tuesday warning that the U.S. and world economy will suffer if Republican presidential candidate Donald Trump wins the U.S. presidential election in November.

The jointly signed letter, first reported by Axios, says the economic agenda of U.S. President Joe Biden, a Democrat, is “vastly superior” to Trump’s, the former Republican president seeking a second term.

Read the source article from Reuters for the rest of the Marxist clown show. What Joe Stiglitz and other Leftist economists are cheerleading in the excessive post Covid spending spree that Biden and Congress went on. There is a different between a free market system and government directed spending, usually on large donors.

One source of crippling inflation under Biden is (wasteful) government spending, up 37.7% under Biden. Federal debt is up a nauseating 50% under Biden. These levels of spending and debt are NOT sustainable!

Another souce of inflation under Biden has been The Federal Reserve. With Covid. The Fed entered like gangbusters dropping their target rate to 25 basis points and massively increasing their balance sheet. Call this BIDEN 1. Then to squelch inflation, The Fed raised their target rate and slowly started to unwind the balance sheet. We saw a slowing of inflation. Nothing to do with Biden, although I am sure he will take credit for it at Thursday’s debate with Trump.

Inflation was growing rapidly in Biden 1, but inflation started to slow (Biden 2) as The Fed rapidly raised their target rate.

Dallas After Midnight! “Poor National Leadership” As Stagflation ‘Erodes Business Confidence’

Dallas after midnight! Especially with a broken Congress and President.

Philly Fed Services jumped into expansion (to two year highs?), Chicago Fed National Activity Index surged, Case-Shiller home prices hit a new record high but appreciation slowed, Conference Board Expectations hovers near decade lows, Richmond Fed Manufacturing tumbled, Dallas Fed Services improved but remains in contraction…

But, below the hood of the last one we see some more interesting dynamics evolving as revenues and employment decline while prices re-accelerate…

Source: Bloomberg

This is the 25th straight month of contraction (sub-zero) for the Dallas Fed Services index and judging by the respondents’ comments, there is a clear place to point the finger of blame:

Poor national leadership and lack of confidence have eroded the business environment.

The Federal Reserve’s recent announcement of no rate cuts in the near future is concerning regarding the immediate and lag effect it could have on the local economy. We have received direct feedback from many of our clients in various industries, and they are increasingly concerned. They are freezing hires and spending, with many reducing spending. The primary reason is the economic stagnation locally and nationally affecting their businesses.
People are adjusting to new economic realities. Few are expecting salary increases and are instead making lifestyle adjustments to deal with higher living costs. Reality is also setting in for the apartment owners we serve. They understand rents aren’t going up and interest rates aren’t coming down. As rate caps expire and loans mature, lenders are having to adapt as well. Ultimately, a lot of private equity (much in the form of individual retirement savings put into syndications) is getting wiped out.
We need a rate cut before we will see any revenue improvement from home sales.
As elections draw near, the political environment worsens, creating more uncertainty in our business.
We feel inflation and fear of more inflation plus the rise in cost of living are holding consumers back. Hopefully we will adapt to the new realities soon.

Customers are concerned about the election, so they are holding off on large purchases.

The lack of building activity is shutting down the appliance industry.
Affordability has become an ever-increasing problem for new car dealers. The price increases of new cars combined with higher interest rates have put new cars out of reach for more and more people.
[Car] inventories continue to swell, and interest rates remain high. Our grosses are off, and margins continue to decline. Profits are down 20 percent from the prior year.
The economy is slowing. The consumer is more cautious and more reluctant to purchase at higher prices and payments.

And finally, this seemed to sum up just how business-owners feel in general about the current occupant of The White House:

“Our outlook depends heavily on the presidential election.

Going Down! Consumer Sentiment Slumps To 7 Month Low In 5-Sigma Miss (As PPI Final Demand Sinks And Fed Loses MORE Money)

We’re going down!

Moments ago the University of Michigan released the latest “report card” on Bidenomics, and to nobody’s surprise – except perhaps a certain senile teleprompter reading, diaper-wearing puppet in the White House – it was another disaster.

One month after the May Consumer Sentiment printed at a record 7-sigma miss to expectations, consumer sentiment once again “unexpectedly” slumped, this time from an upward revised 68.8 to 67.6, the lowest print since last November, and the biggest 3-month drop in sentiment (-13.8 points) going back to the covid lockdowns.

… which was not only a 5-sigma miss to the median estimate (an improvement from last month’s 7-sigma)…

… but also the biggest miss of 2024.

The collapse in sentiment was broad based, and hammered both current conditions – which plunged from 69.6 to 62.5, the lowest since 2022 and badly missing estimates of 72.2 – and also expectations, which dropped from 68.8 to 67.6 (and also far below the 72.0 estimate).

The decline in sentiment coincides with signs that the labor market, which has driven consumer spending over the last year, is also falling apart. The unemployment rate rose to 4% last month, the highest in more than two years, while jobless claims unexpectedly soared following a firing frenzy out of California.

“While lower-income families have, as a group, seen notable wage gains in a strong labor market, their budgets remain tight amid continued high prices even as inflation has slowed,” Joanne Hsu, director of the survey, said in a statement.

But wait there’s more, because if that was the “stag” part of the report, the UMich report also confirmed that the “flation” isn’t far behind, as the inflation outlook continued its recent deterioration, to wit: 1 Year inflation expectations remained unchanged at 3.3%, beating estimates of a drop back 3.2%, while 5-10 Year inflation expectations rose from 3.0% to 3.1%, the highest since November.

If that wasn’t enough, the slide in sentiment suggests restrained consumer demand in coming months. The university’s measure of buying conditions for durable goods decreased to the lowest level since December 2022, a glowing testament to just how tapped out the US consumer truly is.

In short: the verdict for Bidenomics is in, and it’s a complete disaster, as for Powell’s recent laughable comment that he can’t see the “stag” nor the “flation”… well, Fed chair, they just bit you on the ass.

On top of a poor consumer sentiment report, the PPI Final Demand index was down … again.

And The Fed and Powell keep losing money.

Biden at the G7, His new name is “The Wanderer.”

Worst Monthly Spike of “Core Services” PCE Inflation in 22 Years (Will This Lead The Fed To Hike Rates?)

Well, this might keep The Fed talking heads up at night.

Over the past year or so, the Fed has been intensely discussing inflation in “core services,” which is where inflation had shifted to in 2022, from goods inflation which had spiked into mid-2022 but then cooled dramatically. So “core services” is where it’s at. Core services is where consumers spend the majority of their money. Core services are all services except energy services. Core services inflation has been behaving badly for months, and in January, it spiked out the wazoo.

The “core services” PCE price index spiked to 7.15% annualized in January from December, the worst month-to-month jump in 22 years (blue line), according to index data released today by the Bureau of Economic Analysis. Drivers of the spike were non-housing measures as well as housing inflation. More on each category in a moment.

The bad behavior of core services inflation that we have been lamenting since June – and which was confirmed earlier this month by the nasty surprise in the CPI – is why Fed governors have said this year in near unison that they’re in no hurry to cut rates, but have taken a wait-and-see approach. And now the concept of rate hikes is cropping up in their speeches again.

For example, Fed governor Michelle Bowman said in the speech yesterday, that she was “willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.”

Even year-over-year, core services inflation has now reversed and accelerated to 3.5%.