Morning Report: Wholesale inflation rise more than expected

Posted on May 14, 2024 by Brent Nyitray

Vital Statistics:

Stocks are flattish this morning after wholesale inflation came in higher than expected. Bonds and MBS are down.

Inflation at the wholesale level rose 0.5% month-over-month and 2.2% year-over year. Ex-food and energy, the index rose 0.5% MOM and 2.4% YOY. Most of the increase in the index was attributable to a 0.6% increase in final demand services, which generally means wages.

The New York Fed released its survey of consumer inflation expectations, which showed short-term inflationary expectations rose to 3.3% from 3.0%. On the positive side, we remain below the 3.5% trailing 12 month average. Inflationary expectations are falling, however we remain above the Fed’s target.

Inflationary expectations are a critical portion of the inflation problem, and the Fed will be reluctant to start cutting rates when expectations are rising.

Small Business Optimism improved in April, according to the NFIB. Confidence rose 1.2%, which was the first increase this year, however we are still below the long-term average for the index. “The Federal Reserve is trapped by its policies, unable to cut rates when inflation stays persistently high (well over the 2% goal). The decline in the inflation rate from 9% could justify a small policy rate cut, but overall, the Fed needs to see more progress on reducing the inflation rate. Historically, recessions accomplish this, that’s when price cutting becomes more common. Last month’s BLS job report suggests some weakening with only about half as many jobs created compared to the prior months. As things stand now, it is likely that there will be only one rate cut this year (seven were expected last January).”

The meme stocks are back. Remember this guy?

Filed under: Economy |

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48 Responses

    • ScottC's avatar
      ScottC, on May 16, 2024 at 5:18 am said:

      If I understand the terms, I think it is a mistake for Trump to agree to them. From what I heard there isn’t going to be an audience. Trump does much better with an audience.

      I also would have insisted that the debate not be until after the Dem convention, on the grounds that Biden is so frail and unpopular that he might not even be the Dem pick. Why waste time on someone who may not even be on the ticket? Even if such a circumstance is unlikely, it would be a good jab at Biden and it would push the debate to a time when Biden doesn’t want to do it.

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      • Brent Nyitray's avatar
        Brent Nyitray, on May 16, 2024 at 9:16 am said:

        I agree with waiting until after the convention. But, nobody is going to watch anyway.

        No matter what happens, the media will declare that Biden won and Trump lost, but there are probably very few undecideds left.

        This election is a referendum on Big Progressive Nanny State Government and the excesses of the left.

        The convention in Chicago is gonna be lit.

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      • jnc4p's avatar
        jnc4p, on May 16, 2024 at 9:52 am said:

        I think it will work to Trump’s favor if he maintains a modicum of self control.

        It also undermines arguments like this that Biden shouldn’t debate Trump because he’s a threat to democracy who shouldn’t be “normalized” by the debates.

        https://www.theatlantic.com/ideas/archive/2024/04/joe-biden-donald-trump-presidential-debate/678079/

        This was a good list of suggestions for Trump:

        https://sashastone.substack.com/p/trump-should-shift-strategy-when

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      • jnc4p's avatar
        jnc4p, on May 16, 2024 at 1:16 pm said:

        “I also would have insisted that the debate not be until after the Dem convention, on the grounds that Biden is so frail and unpopular that he might not even be the Dem pick.”

        Nate Silver on this:

        There’s one other tactical wrinkle — I suppose I’m skeptical that the White House was thinking about it, but if so, I’ll up their grade from A+ to A+++. By moving the first debate to before the Democratic convention in August, Democrats increase their option value. Here’s what I mean by that. If Biden totally and irrecoverably screws up in the June debate — he’s just obviously no longer ready for prime time — then he can step down and Democrats can pull the Ezra Klein break-glass-in-case-of-emergency plan and hold a contested convention. It’s not ideal — that’s an understatement — but it’s much less bad than going into the final months of the campaign certain to lose.

        After all, if Democrats really think that Trump is an existential threat to democracy or whatever else, that means making the most of their position, however poor it might be. Biden is trailing in the swing states, faces a number of other headwinds, and otherwise holds a fairly bad hand. Today the White House pulled off a great bluff — but if that June debate goes really badly, the only remaining move will be to fold.

        https://www.natesilver.net/p/what-bidens-debate-gambit-reveals

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  2. jnc4p's avatar
    jnc4p, on May 16, 2024 at 9:54 am said:

    Interesting ruling.

    Supreme Court rejects broad challenge to consumer watchdog CFPB

    The Biden administration urged the Supreme Court to reject an appeals court decision that cast doubt on Congress’s authority to decide how to fund an agency.

    By Ann E. Marimow and Justin Jouvenal

    Updated May 16, 2024 at 10:43 a.m. EDT

    https://www.washingtonpost.com/politics/2024/05/16/supreme-court-cfpb-funding/

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  3. jnc4p's avatar
    jnc4p, on May 16, 2024 at 10:02 am said:

    Maybe the kids are alright:

    What young voters actually care about

    It’s not what you think.

    By Christian Paz@realcpaz

    May 16, 2024, 7:15am EDT

    …

    The top priority for young voters is also the one where they trust Biden least

    When young people talk about the economy, they overwhelmingly mean lowering prices on food, gas, and services — not creating more jobs, lowering interest rates, or even earning higher wages (though that’s the second most important thing).

    That dynamic is nearly the inverse of the way the president has been talking about his economic record and about his plans for a second term. For most of his presidency and the campaign so far, he’s primarily talked about wage growth, cutting junk fees, and the historically low unemployment rate. And young voters see this: there’s a 37-point gap between how much they want Biden to prioritize lowering prices, and how much they think he is.

    Trump, meanwhile, is seen as focusing on prices. And this is the crucial conclusion: Trump is trusted more than Biden on the single most important issue: 52 percent say they trust Trump over Biden to reduce prices.

    …

    When talking about young voters today, it seems like most politicians and the journalists covering the nation seem to default to a handful of progressive priorities: climate change, student loan cancellation, identity politics, and the war in Gaza.

    But at least according to this poll, those don’t tend to be the issues that young voters are prioritizing the most. Among the lowest-priority issues in this survey are LGBTQ issues, student loans (both chosen 38 percent of the time), while climate change, Israel and Palestine, democracy, and race relations were chosen just about half the time. And they don’t necessarily want Biden to make a major change on some of these topics.

    https://www.vox.com/2024-elections/24157594/young-voters-are-just-normies-poll-biden-economy

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    • Brent Nyitray's avatar
      Brent Nyitray, on May 16, 2024 at 10:32 am said:

      “When talking about young voters today, it seems like most politicians and the journalists covering the nation seem to default to a handful of progressive priorities”

      Twas always thus. Surprised they didn’t mention the biggest bugaboo of the left – income inequality

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  4. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 16, 2024 at 12:23 pm said:

    Gaia weeps.

    https://12ft.io/proxy

    NEW LINK.

    https://12ft.io/proxy

    There is nothing it can’t do.

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  5. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 17, 2024 at 10:49 am said:

    No one ever went broke betting that politicians are corrupt. That said, why now and why Menendez? What FP was he bucking or straying from the blob line?

    https://redstate.com/jeffc/2024/05/16/bob-menendezs-defense-strategy-involves-arguing-bribes-were-friendly-gifts-not-bribes-n2174298

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  7. jnc4p's avatar
    jnc4p, on May 18, 2024 at 2:19 pm said:

    Magic Monetary Theory Goes Primetime

    Modern Monetary Theory was interesting back when it was dismissed as a fringe curiosity, but more like terrifying now that it’s being taken seriously

    Matt Taibbi

    May 18, 2024

    ∙ Paid

    https://www.racket.news/p/magic-monetary-theory-goes-primetime

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  8. jnc4p's avatar
    jnc4p, on May 18, 2024 at 4:51 pm said:

    Profile of the FTC head:

    The education of Lina Khan, whose superpower is busting monopolies

    Leading the “hipsters” of antitrust law, Khan is recovering from a rough start at the FTC.

    By Steven Pearlstein

    May 14, 2024 at 5:45 a.m. EDT

    https://archive.ph/NLewc

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  9. jnc4p's avatar
    jnc4p, on May 19, 2024 at 8:33 pm said:

    Good read:

    Nellie Bowles on How the Revolution Went Mainstream

    Yascha Mounk and Nellie Bowles discuss her career at The New York Times and reporting on the ground from urban “autonomous zones” in 2020.

    Yascha Mounk

    May 18, 2024

    https://www.persuasion.community/p/bowles

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    • Brent Nyitray's avatar
      Brent Nyitray, on May 20, 2024 at 8:18 am said:

      Bari Weiss is not a Nazi. These people are batshit crazy

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      • jnc4p's avatar
        jnc4p, on May 21, 2024 at 9:57 am said:

        Every generation has to rediscover Lord of the Flies:

        Bowles: This movement that has so won the day has actually a very optimistic view of human nature. It really thinks people are fundamentally good. And we are only denatured by capitalism, by white supremacy, by hetero patriarchy. We are denatured by these forces. And if we could only release ourselves from these denaturing forces, our real human spirit of goodness and kindness and perfection would emerge. And that we don’t need police for that reason, that we don’t need to enforce rules for that reason. Because in this new world, people won’t do things to hurt each other. It sounds crazy but this was actually the rhetoric behind a lot of this.

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  10. jnc4p's avatar
    jnc4p, on May 20, 2024 at 8:31 am said:

    Maybe if we say it louder they will get it:

    Voters Don’t Care About the Economy as Much as They Think They Do

    Why Biden is getting no credit for the boom

    By Annie Lowrey

    May 20, 2024, 8:42 AM ET

    Joe Biden is, at the moment, losing his reelection campaign. And he is doing so while presiding over the strongest economy the United States has ever experienced.

    The jobless rate is below 4 percent, as it has been for nearly two and a half years. Wage growth is moderating, but it is higher than it was at any point during the Obama administration; overall, Biden has overseen stronger pay increases than any president since Richard Nixon. Inflation has cooled off considerably, meaning that consumers’ purchasing power is strong.

    https://www.theatlantic.com/ideas/archive/2024/05/biden-economy-election/678431/

    “Strongest economy the United States has ever experienced” is laughable.

    For myself in my lifetime, the strongest economy would be either the 1980’s or 1990’s booms.

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  12. jnc4p's avatar
    jnc4p, on May 21, 2024 at 9:40 am said:

    I used to respect Radley Balko.

    Trump’s deportation army

    The former president’s vow to deport 15 million people is the cruelest, most illiberal, most openly authoritarian campaign promise in modern U.S. history. Oh, and it would also destroy the economy.

    Radley Balko

    May 21, 2024

    …

    I hate to go all Godwin here, but when you combine Miller’s plan and personal history with Trump’s recent rhetoric portraying immigrants as diseased “animals” turned loose from foreign prisons and mental facilities who “poison the blood” of the country — or his ridiculous descriptions of migrants as “military-aged” — you could be forgiven for noticing that we’re accumulating the necessary ingredients of a genocide. It certainly checks a lot of boxes. At the very least, they’re creating the conditions for a mass humanitarian crisis.

    https://radleybalko.substack.com/p/trumps-deportation-army

    “Genocide” is apparently the new “racism” in terms of being the go-to characterization from progressives to shut down discussion of anything they don’t like.

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  13. jnc4p's avatar
    jnc4p, on May 21, 2024 at 2:25 pm said:

    Full panic mode:

    Biden releases 1 million barrels of gasoline in bid to lower summer costs

    The move underscored the White House’s attempts to tame consumer prices, especially with voters feeling sour on the economy.

    By Rachel Siegel and Evan Halper

    May 21, 2024 at 3:15 p.m. EDT

    https://www.washingtonpost.com/business/2024/05/21/biden-gas-inflation/

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  14. jnc4p's avatar
    jnc4p, on May 21, 2024 at 2:37 pm said:

    TL:DR – The media and the Biden campaign (but I repeat myself) lied about what Trump said, again.

    “The Real Meaning of Trump’s ‘Unified Reich’ Post

    The video the former president reposted on Truth Social yesterday isn’t what people are making it out to be.

    By David A. Graham

    https://www.theatlantic.com/ideas/archive/2024/05/trump-unified-reich-truth-social/678443/

    Was surprised to see The Atlantic do a fact check on this, even though of course they had the qualifiers that Trump is a Nazi even if this particular video isn’t evidence of that.

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    • Brent Nyitray's avatar
      Brent Nyitray, on May 21, 2024 at 2:42 pm said:

      I don’t believe a word of the MSM anymore regarding Trump

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      • jnc4p's avatar
        jnc4p, on May 21, 2024 at 2:50 pm said:

        Yep. It’s like reading Pravda. You don’t expect to get factual information but it does provide a window into what the regime is thinking these days. Which propaganda they are trying to catapult.

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  15. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 21, 2024 at 8:31 pm said:

    That settles it, I’m not fucking Jane Fonda until Gaia stops weeping

    https://x.com/CitizenFreePres/status/1793013593253794159

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  16. jnc4p's avatar
    jnc4p, on May 22, 2024 at 1:39 pm said:

    Good piece:

    Asymmetric Idiocy

    CJ Hopkins

    May 22, 2024

    I miss the 1970s sometimes. Not just the music. And the sex. And the drugs. I miss the terrorists. The old-school terrorists. Or, OK, maybe not the terrorists themselves, but the revolutionaries who cheered on the terrorists. I miss the clarity, and the honesty, of that era.

    Maybe you’re too young to remember, but, back in the day, you didn’t get all this hemming and hawing and weaseling about murdering civilians. The terrorists, and the revolutionaries who supported them, were not ashamed of murdering civilians. The Revolution demanded that they murder civilians. Murdering civilians was one of the fundamental strategies of the Revolution.

    The way this strategy works is simple. What you do is, you murder a bunch of civilians, in order to provoke your adversary into massively over-retaliating against you and committing all kinds of war crimes and atrocities, like the USA did in Iraq twenty years ago, like the IDF is now doing in Gaza. The goal of the strategy is to broaden the conflict, and draw your potential allies into it, or at least significantly weaken support for your enemy.

    OK, sure, that means you have to murder some people … men, women, children, whole families, and then your enemy is going to go apeshit and kill tens or even hundreds of thousands of your people, but, if all goes to plan, your “allies” will join you, and attack your enemy, and drive him into the sea, or off the face of the earth, or wherever. So, in the end, all the murdering will have been totally worth it.

    This is not a theory I just made up. It is one of the basics of asymmetric warfare. If you are not already familiar with that subject, this might be a good time to look into it.

    I’m not a fan of murdering civilians. Not even for the Revolution. I do not think it is a very good strategy. Plus, well, the murdering. I’m against that, generally. Soldiers killing each other is one thing. They have been doing that since the dawn of history. And I have no problem with guerilla tactics. People fight wars with the means they have available. It’s just the murdering thing that I can’t get down with. Especially the murdering of the women and the kids, but it’s probably not politically correct to say that, what with the diversity, equity, and inclusion thing these days.

    https://cjhopkins.substack.com/p/asymmetric-idiocy

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  18. jnc4p's avatar
    jnc4p, on May 22, 2024 at 9:00 pm said:

    This one was great too:

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Be kind, show respect, and all will be right with the world.