Inflationary Pressures

[HeadedHome]

I’ve been having some significant issues with the CPI and other inflationary metrics I’ve seen released.

I manage the retailer business for a consumer durables manufacturer. Our products are significantly comprised of commodities like copper, steel, and petroleum (plastics).

Virtually every consumer durables & food manufacturer I know has given multiple, significant price increases to retailers recently. The trend is unlike anything I’ve seen. Even proposing a price increase used to be a capital offense. Recently, I got approvals with several global retailers for a significant price increase over the phone!

Given the preponderance of at least part-time economists here, what is your take? It certainly looks like someone is cooking the numbers here. I know a lot is stripped out of the CPI often (energy, etc), but even given the typical exclusions numbers such as the .5% CPI increase in April looks irrational.

Thoughts?

[DWCAP]

ill leave the buisness climate on accepting inflation for those who know more than me.

I just wanted to put out there that it seems that rates are also going up due to inflation, even if it isnt so obvious in the CPI. ( a 33 point jump in a week, plus I think points are alittle higher now too!) I think the inflation genie is making a run for it.

“Application volume declined as interest rates rose. The average rate for traditional, 30-year fixed-rate mortgages rose to 6.57% during the week ended June 13, from 6.24% the previous week.

Rates for 15-year fixed-rate mortgages, a popular option for refinancing a home, rose to 6.14% from 5.78%.

The average rate for one-year adjustable-rate mortgages jumped to 7.22% from 6.87%”

http://money.cnn.com/2008/06/18/news/economy/mortgage_applications.ap/index.htm?postversion=2008061808

[DWCAP]

ill leave the buisness climate on accepting inflation for those who know more than me.

I just wanted to put out there that it seems that rates are also going up due to inflation, even if it isnt so obvious in the CPI. ( a 33 point jump in a week, plus I think points are alittle higher now too!) I think the inflation genie is making a run for it.

“Application volume declined as interest rates rose. The average rate for traditional, 30-year fixed-rate mortgages rose to 6.57% during the week ended June 13, from 6.24% the previous week.

Rates for 15-year fixed-rate mortgages, a popular option for refinancing a home, rose to 6.14% from 5.78%.

The average rate for one-year adjustable-rate mortgages jumped to 7.22% from 6.87%”

http://money.cnn.com/2008/06/18/news/economy/mortgage_applications.ap/index.htm?postversion=2008061808

[DWCAP]

ill leave the buisness climate on accepting inflation for those who know more than me.

I just wanted to put out there that it seems that rates are also going up due to inflation, even if it isnt so obvious in the CPI. ( a 33 point jump in a week, plus I think points are alittle higher now too!) I think the inflation genie is making a run for it.

“Application volume declined as interest rates rose. The average rate for traditional, 30-year fixed-rate mortgages rose to 6.57% during the week ended June 13, from 6.24% the previous week.

Rates for 15-year fixed-rate mortgages, a popular option for refinancing a home, rose to 6.14% from 5.78%.

The average rate for one-year adjustable-rate mortgages jumped to 7.22% from 6.87%”

http://money.cnn.com/2008/06/18/news/economy/mortgage_applications.ap/index.htm?postversion=2008061808

[DWCAP]

ill leave the buisness climate on accepting inflation for those who know more than me.

I just wanted to put out there that it seems that rates are also going up due to inflation, even if it isnt so obvious in the CPI. ( a 33 point jump in a week, plus I think points are alittle higher now too!) I think the inflation genie is making a run for it.

“Application volume declined as interest rates rose. The average rate for traditional, 30-year fixed-rate mortgages rose to 6.57% during the week ended June 13, from 6.24% the previous week.

Rates for 15-year fixed-rate mortgages, a popular option for refinancing a home, rose to 6.14% from 5.78%.

The average rate for one-year adjustable-rate mortgages jumped to 7.22% from 6.87%”

http://money.cnn.com/2008/06/18/news/economy/mortgage_applications.ap/index.htm?postversion=2008061808

[DWCAP]

ill leave the buisness climate on accepting inflation for those who know more than me.

I just wanted to put out there that it seems that rates are also going up due to inflation, even if it isnt so obvious in the CPI. ( a 33 point jump in a week, plus I think points are alittle higher now too!) I think the inflation genie is making a run for it.

“Application volume declined as interest rates rose. The average rate for traditional, 30-year fixed-rate mortgages rose to 6.57% during the week ended June 13, from 6.24% the previous week.

Rates for 15-year fixed-rate mortgages, a popular option for refinancing a home, rose to 6.14% from 5.78%.

The average rate for one-year adjustable-rate mortgages jumped to 7.22% from 6.87%”

http://money.cnn.com/2008/06/18/news/economy/mortgage_applications.ap/index.htm?postversion=2008061808

[XBoxBoy]

The government has plenty of reasons to skew the inflations statistics, and from everything I’ve ever seen, they darn sure do. If you want a conservative view of how badly things are skewed, you might read Bill Gross June newsletter over at pimco:

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+June+2008.htm

Not as conservative, but backed by data is John William’s site, Shadow Government Statistics. He calculates that if we were still calculating CPI the way the government did before Clinton, we would currently be just under 8%.

http://www.shadowstats.com/

And if you go to the store, you might not know how to calculate inflation, but you sure do know that prices sure are going up fast. And might I add, pretty much everyone knows. Which is why I shake my head when I hear the fed officials talking about how “if” inflation expectations were to become unmoored….. Yeah, right, like what planet do you guys live on? Inflation expectations in the general public have been unmoored for a long time and are only getting worse.

XBoxBoy

[XBoxBoy]

The government has plenty of reasons to skew the inflations statistics, and from everything I’ve ever seen, they darn sure do. If you want a conservative view of how badly things are skewed, you might read Bill Gross June newsletter over at pimco:

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+June+2008.htm

Not as conservative, but backed by data is John William’s site, Shadow Government Statistics. He calculates that if we were still calculating CPI the way the government did before Clinton, we would currently be just under 8%.

http://www.shadowstats.com/

And if you go to the store, you might not know how to calculate inflation, but you sure do know that prices sure are going up fast. And might I add, pretty much everyone knows. Which is why I shake my head when I hear the fed officials talking about how “if” inflation expectations were to become unmoored….. Yeah, right, like what planet do you guys live on? Inflation expectations in the general public have been unmoored for a long time and are only getting worse.

XBoxBoy

[XBoxBoy]

The government has plenty of reasons to skew the inflations statistics, and from everything I’ve ever seen, they darn sure do. If you want a conservative view of how badly things are skewed, you might read Bill Gross June newsletter over at pimco:

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+June+2008.htm

Not as conservative, but backed by data is John William’s site, Shadow Government Statistics. He calculates that if we were still calculating CPI the way the government did before Clinton, we would currently be just under 8%.

http://www.shadowstats.com/

And if you go to the store, you might not know how to calculate inflation, but you sure do know that prices sure are going up fast. And might I add, pretty much everyone knows. Which is why I shake my head when I hear the fed officials talking about how “if” inflation expectations were to become unmoored….. Yeah, right, like what planet do you guys live on? Inflation expectations in the general public have been unmoored for a long time and are only getting worse.

XBoxBoy

[XBoxBoy]

The government has plenty of reasons to skew the inflations statistics, and from everything I’ve ever seen, they darn sure do. If you want a conservative view of how badly things are skewed, you might read Bill Gross June newsletter over at pimco:

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+June+2008.htm

Not as conservative, but backed by data is John William’s site, Shadow Government Statistics. He calculates that if we were still calculating CPI the way the government did before Clinton, we would currently be just under 8%.

http://www.shadowstats.com/

And if you go to the store, you might not know how to calculate inflation, but you sure do know that prices sure are going up fast. And might I add, pretty much everyone knows. Which is why I shake my head when I hear the fed officials talking about how “if” inflation expectations were to become unmoored….. Yeah, right, like what planet do you guys live on? Inflation expectations in the general public have been unmoored for a long time and are only getting worse.

XBoxBoy

[XBoxBoy]

The government has plenty of reasons to skew the inflations statistics, and from everything I’ve ever seen, they darn sure do. If you want a conservative view of how badly things are skewed, you might read Bill Gross June newsletter over at pimco:

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+June+2008.htm

Not as conservative, but backed by data is John William’s site, Shadow Government Statistics. He calculates that if we were still calculating CPI the way the government did before Clinton, we would currently be just under 8%.

http://www.shadowstats.com/

And if you go to the store, you might not know how to calculate inflation, but you sure do know that prices sure are going up fast. And might I add, pretty much everyone knows. Which is why I shake my head when I hear the fed officials talking about how “if” inflation expectations were to become unmoored….. Yeah, right, like what planet do you guys live on? Inflation expectations in the general public have been unmoored for a long time and are only getting worse.

XBoxBoy

[cooperthedog]

There’s also stealth inflation; when a product’s quantity/size is reduced and the price remains the same (or higher) per unit.

General Mills did this last year. They cut the cost of their cereal, modified the box depth (so the box appears the same size on the shelf) and put less cereal in it, but the reduction in price was not as great as the reduction in product, so the cost per unit actually increased…

Has anyone picked up a std. Hershey chocolate bar recently? Those things are almost paper thin!

[cooperthedog]

There’s also stealth inflation; when a product’s quantity/size is reduced and the price remains the same (or higher) per unit.

General Mills did this last year. They cut the cost of their cereal, modified the box depth (so the box appears the same size on the shelf) and put less cereal in it, but the reduction in price was not as great as the reduction in product, so the cost per unit actually increased…

Has anyone picked up a std. Hershey chocolate bar recently? Those things are almost paper thin!

[cooperthedog]

There’s also stealth inflation; when a product’s quantity/size is reduced and the price remains the same (or higher) per unit.

General Mills did this last year. They cut the cost of their cereal, modified the box depth (so the box appears the same size on the shelf) and put less cereal in it, but the reduction in price was not as great as the reduction in product, so the cost per unit actually increased…

Has anyone picked up a std. Hershey chocolate bar recently? Those things are almost paper thin!

[cooperthedog]

There’s also stealth inflation; when a product’s quantity/size is reduced and the price remains the same (or higher) per unit.

General Mills did this last year. They cut the cost of their cereal, modified the box depth (so the box appears the same size on the shelf) and put less cereal in it, but the reduction in price was not as great as the reduction in product, so the cost per unit actually increased…

Has anyone picked up a std. Hershey chocolate bar recently? Those things are almost paper thin!

[Author]

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