progree
progree's JournalGRAPHS - Core PCE - Rolling 3 month, 6 month, and 12 month averages thru January 2023
It all points to a Core PCE that is a bit more than double the Fed's target. Before January's number, one could argue there's been a very slow downward tilt over the last 6-8 months. With January's number, it's more like a flatlining.
Some may say that January is an anomalous "one off" on the high side. Others may say that December is an anomalous "one off" on the low side that January corrects.
There's a lot of chatter about the "no landing" scenario -- that inflation continues to stay elevated like in the graphs. I think with just a quarter percent rate hike on March 22, and another quarter point increase on May 3, that will likely continue to be the case for a long time.
With the hawkish noises from several FOMC members since the mid-month CPI and PPI reports, and more since yesterday, I think a half percent rate hike in March is a better bet. Note that before the March 22 FOMC meeting, new CPI and PPI reports will be released. (The next PCE report is March 31).
GRAPHS: The "x" axis is the month of the year, where the "1" is January 2022, "12" is December 2022, and "13" is January 2023.
All of the percentage increases are annualized numbers
On the rolling 3 month one can say its been flatlined since April 2022 at around 4.5%, with wiggles
The rolling 6 month - one can say its been flatlined since January 2022 at close to 5%, with wiggles
The rolling 12 month average has basically flatlined since July to about 4.7%.
I've always been a severe critic of 12 month inflation numbers when assessing RECENT or CURRENT inflation, but provide it for comparative purposes.
CORE PCE, which is shown in the above graphs: https://fred.stlouisfed.org/series/PCEPILFE
(PCE is at: https://fred.stlouisfed.org/series/PCEPI )
Percentages are calculated from the actual index numbers, not on averaging one-significant-digit numbers.
At 4.5% inflation, the value of a dollar drops to 50 cents in just 16 years.
Extra funding does little to increase dental care for Medical Assistance recipients (MN)
MPR, February 24, 2023
But Sundve, who lives in Litchfield, Minn., said getting her foster kids in to see a dentist was hard. It's because they're on Medical Assistance — or Medicaid, as it's more commonly known outside Minnesota — and don’t see a dentist regularly.
You call and call and call and ask people if they have any new patients’ availability. And the answer often is ‘No.’"
. . . In 2021, state legislators tried to fix the problem by nearly doubling the amount of money MA pays dentists for each appointment. They set goals for the number of visits MA enrollees should have annually.
But based on data from the state and from health insurance companies that manage most MA enrollees, the changes haven’t made much of a difference.
For years, low reimbursement rates were to blame for Minnesota’s notably low access to dental care for MA enrollees, Liebling said. Rates were based on decades old dental costs.
“Kind of famously, those rates are really low. Another complaint we would hear is that dentists weren't even told what they would be paid until after they provided the service,” she said.
MORE: https://www.mprnews.org/story/2023/02/24/extra-funding-does-little-to-increase-dental-care-for-ma-recipients
Reimbursement rates are still way low even after doubling, compared to regular commercial insurance reimbursement rates or prevailing rates
And there is a big shortage of dental assistants and hygienists.
See also:
About 655,000 Minnesota children were enrolled in Medicaid, but only 36 percent of them received dental services included in their coverage, according to 2017 statistics. That puts Minnesota noticeably below the national average.
The number of dentists who see children in public programs declined from 2,906 in 2015 to about 2,253 last year, according to the Department of Human Services.
More: https://www.mprnews.org/story/2018/11/28/low-income-minnesota-families-struggle-to-get-dental-care
Last 12 months monthly changes. And Graphs! And rolling 3 month averages
From the news release, http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm
From the preceding month, the PCE price index for January increased 0.6 percent (table 9). Prices for goods and services both increased 0.6 percent as well. Food prices increased 0.4 percent and energy prices increased 2.0 percent. Excluding food and energy, the PCE price index also increased 0.6 percent. Detailed monthly PCE price indexes can be found on Table 2.4.4U.
From the same month one year ago, the PCE price index for January increased 5.4 percent (table 11). Prices for goods increased 4.7 percent and prices for services increased 5.7 percent. Food prices increased 11.1 percent and energy prices increased 9.6 percent. Excluding food and energy, the PCE price index increased 4.7 percent from one year ago.
And they show the last 5 months. I found the latest 12 months (and way beyond) at FRED:
PCE: https://fred.stlouisfed.org/series/PCEPI
CORE PCE: https://fred.stlouisfed.org/series/PCEPILFE
PCE Inflation (just came out today, February 24):
PCE, rolling 3 month averages, annualized
7.2% 7.3% 7.4% 6.2% 4.8% 2.1% 4.2% 3.8% 3.2% 4.0%
CORE PCE, rolling 3 month averages, annualized
4.3% 4.3% 5.4% 4.4% 5.1% 4.5% 5.4% 4.0% 3.6% 4.7%
Consumer Price Index (CPI)
CPI - https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth
CORE CPI - http://data.bls.gov/timeseries/CUSR0000SA0L1E&output_view=pct_1mth
(Choose "More Formatting Options" at the upper right of the page for other views such as rolling averages of past 12 months, past 6 months, past 3 months)
Producer Price Index (PPI)
OLD CORE PPI - Producer Price Index, seasonally adjusted - Final demand goods less foods and energy -
http://data.bls.gov/timeseries/WPSFD413?output_view=pct_1mth
CORE PPI - Producer Price Index, seasonally adjusted - Final demand less foods. energy. and trade services - This is the core measure that the BLS features, so I will follow their lead
http://data.bls.gov/timeseries/WPSFD49116?output_view=pct_1mth
(Choose "More Formatting Options" at the upper right of the page for other views such as rolling averages of past 12 months, past 6 months, past 3 months)
Why the Fed thinks core is better for forecasting future inflation: https://www.democraticunderground.com/10143025190#post10
3 months annualized: Core CPI: 4.58%, Core PPI: 4.63%, Core PCE: 4.75%
I chose 3 months for its recency, but that it's still a longer period than one month, so less likely that one can dismiss it as a "one off", as some are trying to do.
To me, there's no way to look at any of these graphs without getting the impression that while inflation is down from the first half of 2022, the last 6 months are showing, at best, a consolidation at more than double the Fed's 2% target. Slightly less optimistically, inflation has been rewarming in the past 6 months.
The latest one-month numbers -- January numbers as reported mid-February (Feb 24 for PCE) -- aren't good either:
Core CPI: 5.06%, Core PPI: 7.27%, Core PCE: 7.07%
CPI: 6.38%, PPI: 8.18%, PCE: 7.69% annualized rates using the actual index numbers
Stocks, Treasury yields, and more (OMG!) : https://finance.yahoo.com/
Fed minutes: 'Ongoing' rate hikes needed, 2 officials wanted 50-point hike
Yahoo Finance, 2/22/23
This is in regard to the January 31 - February 1 Federal Open Market Committee (FOMC) meeting, whose meeting minutes came out today, Feb 22. These are the people that vote on interest rate hikes
https://finance.yahoo.com/news/fed-minutes-ongoing-rate-hikes-needed-2-officials-wanted-50-point-hike-195355428.html
Instead, officials appeared to remain steadfast in their commitment to raising interest rates to beat inflation, according to minutes from the central bank's latest policy meeting released Wednesday.
Fed officials felt inflation is still “unacceptably high” and that while inflation data received over the past three months showed a welcome drop in the pace of monthly price increases, officials felt that substantially more evidence of progress across a broader range of prices would be required to be confident that inflation was coming down.
The minutes also said that "a few" participants favored raising the federal funds rate by 50 basis points at the Feb. 1 policy meeting, noting that a larger increase would more quickly bring the target range close to the levels they believed would achieve a sufficiently restrictive stance.
Still, several participants noted the possibility that as consumers become more price sensitive, businesses might accept lower profit margins in an effort to maintain market share, which could reduce inflation temporarily. And nearly all members favored slowing the pace of rate hikes to evaluate the impact that existing hikes have had on the economy.
And that was back when inflation looked like it was on a definite cool-down trend (I thought so too back then).
This January 31 - February 1 FOMC meeting (discussed above whose minutes came out today) was before:
* the very hot jobs report that came out February 3 with 517,000 new payroll jobs
* the hot CPI and PPI (wholesale prices) inflation reports below that came out in mid February
* the 3% (in just one month) retail sales sales increase in January (the report came out February 15).
Lately, particulary since the mid-February CPI and PPI and retail sales reports, all I have been reading are bullish (meaning pushing for larger interest rate increases) from various members of the Federal Open Market Committee (FOMC) that vote on rate hikes,
As for the meme that interest rate rises won't affect the current inflation, because it's is a global phenomenon caused by supply chain disruptions, Ukraine/Russia, etc., that may be true, but I should note that none of the FOMC or other Federal Reserve people talk that way, and neither, FWIW, does anyone in the administration that I've heard of. Paul Volcker would also disagree (however, the price we paid was a double-dip recession). As for globally, other central banks (except Turkey) have been pushing up their interest rates too.
So expect at least a 0.5% rate increase at the next FOMC meeting March 21-22. Don't be fooled by anything "dovish" that you read in the Jan 31 - Feb 1 meeting minutes above.
On the inflation front:
3 months annualized: Core CPI: 4.58%, Core PPI: 4.63%,
I chose 3 months for its recency, but that it's still a longer period than one month, so less likely that one can dismiss it as a "one off". (The latest one-month numbers -- January numbers as reported mid-February -- aren't good either: Core CPI: 5.06%, Core PPI: 7.27%, CPI: 6.38%, PPI: 8.18% annualized rates using the actual index numbers)
I thought they were on their way down before the mid-February reports of January inflation.
More on the graphs of monthly CPI, PPI, Core CPI, PPI, and why the Fed and I think core is better for predicting future inflation
https://www.democraticunderground.com/10143034894#post1
At 4.5% inflation, the purchasing power of the dollar drops by half in just 16 years.
I'm not looking for the stock market to bail me out either - its valuations are way way high on a historic basis. That was justified back when interest rates were trivial (so there was no real competition to stocks - "TINA - There Is No Alternative" ), but not so much anymore.
Fossil Fuel Consumption Subsidies Soared to Record Heights in 2022
per IEA (International Energy Agency) report. More than double the 2021 amount, to more than $1 trillion in 2022.
usonian thread in General Discussion with big excerpt and link to the report -
https://www.democraticunderground.com/100217666383
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Member since: Sat Jan 1, 2005, 04:45 AM
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