CONSUMER PRICE INDEX – FEBRUARY 2018
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis after rising 0.5 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent before seasonal adjustment.
The index for all items less food and energy increased 0.2 percent in February following a 0.3-percent increase in January. Along with shelter, apparel, and motor vehicle insurance, the indexes for household furnishings and operations, education, personal care, and airline fares also increased in February. In contrast, the indexes for communication, new vehicles, medical care, and used cars and trucks declined over the month.
The index for all items less food and energy rose 1.8 percent over the past year, while the energy index increased 7.7 percent and the food index advanced 1.4 percent.
This morning’s headlines on the CPI:
- U.S. Inflation Picked Up in February Without Any Big Acceleration (Bloomberg)
- Stock futures jump after data dims fears of inflation overheating (Reuters)
Here are the facts:
- Total CPI: Last 7 months annualized: +3.8%. Last 4 months a.r.: +3.6%. Last 3 months a.r.: +3.6%. Last 2 months a.r.: +4.3%.
- Core CPI: Last 7 months annualized: +2.2%. Last 4 months a.r.: +2.4%. Last 3 months a.r.: +2.8%. Last 2 months a.r.: +3.0%.
U.S. Small Businesses Are More Optimistic Than They’ve Been in Decades
(…) Almost all of the 10 index components, including inventory plans and sales expectations, increased or held steady in February, propelling the gauge to its second-highest level since the survey began in 1973. Amid tax cuts and deregulation enacted by the Trump administration, businesses cited improved profit trends at the best level since 1987. (…)
- The best of times:
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Sales expectations are rising faster than actual sales:
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Job openings have stalled at the past peak level. Hiring plans are moderating:
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More. higher paid workers not offset by higher prices:
- Yet, strong profits:
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But inventories have spiked lately. Have sales expectations been too high?
Full NFIB pdf.
Trade Conflicts Threaten Global Growth, Says OECD
(…) “Escalation would not be the road we would want to go down because we know from history what will happen,” said Mr. Pereira, a former minister of economy in Portugal. “Escalation usually goes down fairly badly for everybody. It’s important to rely on global solutions to excess capacity in the steel industry.”
The OECD didn’t give figures for the losses in output that would likely follow an escalation, but the Dutch ING Bank Tuesday published a separate analysis which estimated the scale of the damage from a broad, 10% charge on European Union exports to the U.S., and U.S. exports to the EU. It calculated that the EU economy would be 0.3% smaller after two years, and the U.S. economy 0.4% smaller. (…)
(…) Bill Walsh, who owns seven dealerships in Illinois, said the average customer is more concerned about the monthly payment than the sticker price. Mr. Walsh said dealers and the auto makers’ finance arms have become adept at arranging payments that customers can afford.
If stiffer steel costs eventually tacked on a few hundred dollars to the price, manufacturers would “do everything” to try to absorb the cost, such as using incentive programs, he said. (…)
Havens Just Aren’t Safe Anymore, Goldman Says
BUY HIGH, SELL LOW!
We don’t know when, but we know this will not end well.
- Corporate debt as a % of sales is at an all-time high. Nobody cares as long as margins remain elevated and interest rates low. Imagine a scenario with rising wages, rising interest rates and slowing sales.
- Debt as a % of cashflow is already at levels it normally reaches during recessions…
- The share of US corporate bonds owned by mutual funds and exchange-traded products continues to climb. (The Daily Shot). When money eventually flees…
sources: Moody’s Analytics, Federal Reserve
Source: @boes_
- “Father, forgive them, for they do not know what they are doing.”
Source: Moody’s Investors Service
Trump’s Message in Blocking Broadcom Deal: U.S. Tech Not for Sale
With his swift rejection of Broadcom Ltd.’s hostile takeover of Qualcomm Inc., President Donald Trump sent a clear signal to overseas investors: Any deal that could give China an edge in critical technology will be swatted down in the name of national security.
Although Broadcom is based in Singapore, China loomed large over the U.S. government’s fears about a foreign takeover of chipmaker Qualcomm. That’s because Qualcomm is locked in a head-to-head race with China’s Huawei Technologies Co. over which company will dominate the development of next-generation wireless technology. (…)
Only five takeovers of American firms have been blocked by U.S. presidents on national security grounds since 1990. Of those, Barack Obama blocked two deals during his two terms. Trump has blocked two in six months. (…)
