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progree's Journal
progree's Journal
July 13, 2023

GRAPHS (Final Edition. Previously was Dump-and-Run Preliminary Edition)

PPI (top, red graph): June: +0.1%, 12 months: +0.2%,
Average of last 3 months: -0.7% (annualized)

Rolling 3 month average (annualized) thru June'23, last 8 readings
4.0% 1.5% 2.0% 0.3% 0.1% -1.4% -2.8% -0.7%

^--The first number is the 3 month average Sep'22 - Nov'22
The second number is the 3 month average Oct'22 - Dec'22
The third number is the 3 month average Nov'22 - Jan'23
and so on with the last number being the 3 month average Apr'23-Jun'23


CORE (final demand less foods, energy, and trade services, bottom blue graph): June: +0.1% , 12 months: +2.6%
Average of last 3 months: +0.8% (annualized)

Rolling 3 month average (annualized) thru June'23, last 8 readings
3.4% 2.9% 4.3% 4.0% 3.9% 2.2% 1.0% 0.8%

^--The first number is the 3 month average Sep'22 - Nov'22
The second number is the 3 month average Oct'22 - Dec'22
The third number is the 3 month average Nov'22 - Jan'23
and so on with the last number being the 3 month average Apr'23-Jun'23


Latest PPI summary http://www.bls.gov/news.release/ppi.nr0.htm
Producer prices front page: http://www.bls.gov/ppi/
Producer Price Index (PPI), seasonally adjusted http://data.bls.gov/timeseries/WPSFD4?output_view=pct_1mth

OLD CORE PPI - Producer Price Index, seasonally adjusted - Final demand goods less foods and energy -
CORE PPI - Producer Price Index, seasonally adjusted - Final demand less foods. energy. and trade services -

I use the latter Core PPI (final demand less foods, energy, and trade services) because that's what the BLS features in its news release).


Graphs from yesterday's CPI report:

This is the last inflation report before the Fed's rate-setting decision on July 26.

The PCE inflation report -- the Fed's favorite -- comes out after the meeting on July 28 (why don't they coordinate? I read the Federal Reserve has 800 PhD's in Economics, not enough apparently).

Thanks BRDS for the help on annotating graphs / images. I've come up with something that's a little more awkward than it should be (In Paint having to save the annotated image and then open it up again, can't just Control C copy instead), but anyway it works. More later. Thanks again.

July 12, 2023

Since January 2021, stock market total return: +17.19%, But consumer prices up 15.91%

So the purchasing power of the total U.S. stock market fund is up 1.10% since inflation began in about January 2021... that is, since inflation consistently above the 2% target began.

The market: VTSAX Vanguard Total Stock Market Index Fund (total U.S. stock market)
Using the Adjusted Close figures which are adjusted for reinvested dividends. Thus these are total return figures:

1/1/21: 91.66
7/12/23: 107.42

Inflation: CPI:
1'21: 262.650 (1'21 means January 2021)
6'23: 303.841
7'23: 304.449 (I just made it 0.2% higher than 6'23)

Real (inflation-adjusted) market up 107.42/91.66 * 262.650/304.449 = 1.01104 => 1.10%.

As for when sustained inflation above the Fed's 2.0% target began: It went above the pre-pandemic approximately 2.0% trendline in around January-February 2021

IMGUR beginning May 2017

One has to get their straight edge out -- I couldn't figure out how to draw a straight line on the graph at IMGUR or the Windows Snip Tool.

I've also looked at every CPI graph from month-by-month to rolling 3 month averages, 6 month averages, 12 month averages, even rolling 36 month averages, so I'm comfortable that January 2021 is close.

Another interesting thing about the above graph is that the inflection point where inflation began a marked slowdown is clear on the graph: around June or July 2022. That X-axis label that is obscured by the "i" in Picsart is July 2022, and that's about where the "kink" is. No surprise: the month over month figures in May 2022 is 0.9% and June is 1.2%, followed by 0.0% and 0.2% in July and August 2022 respectively, making for a rather sharp change in slope.

As for the current CPI and core CPI trends (in the past 13 months or so):


July 12, 2023

Graphs (the Core CPI finally edges down on a rolling 3 month basis)

though nowadays they look at things like "supercore service inflation" and core ex shelter and who knows what other series.

First the regular headline CPI number, and the regular month-by-month increases (rolling 3 months stuff comes later) :

Now the CORE CPI number that the Fed is more interested in (though actually its the CORE PCE inflation gauge that historically has been their #1 gauge of underlying inflation trend to project FUTURE inflation)

Obviously a nice move downward in June. It is actually a 0.16% increase when calculated using the actual index numbers (1.91% annualized). But is it a "one off" outlier?

CORE CPI Rolling 3 month average thru June 2023:

A rolling 3 month helps smooth out month-to-month volatility, and since 3 months is an average of 3 data points, is less likely to be dismissed as a "one off" like a single month's increase could be.

It's been stuck in the 4 to 5% range since November, but has hit the bottom of that range (4.08% annualized calculated using the actual index numbers). Still 2X the Fed's target. So yes, more rate hikes are coming (next Fed rate-setting meeting is July 26-27)

Various series:

BLS CPI press release: https://www.bls.gov/news.release/cpi.nr0.htm
CPI: https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth
CORE CPI: http://data.bls.gov/timeseries/CUSR0000SA0L1E&output_view=pct_1mth

For all BLS timeseries data, one can see the index values and other periods like rolling 3 month, rolling 6 month, rolling 12 months by clicking "More Formatting Options" on the upper right and then on the page that shows up, check the various checkboxes

REAL AVERAGE HOURLY EARNINGS of production and non-supervisory workers https://data.bls.gov/timeseries/CES0500000032 ,
. . . private workers: https://data.bls.gov/timeseries/CES0500000013

CPI excluding shelter - https://data.bls.gov/timeseries/CUUR0000SA0L2
. . . FRED: https://fred.stlouisfed.org/series/CUUR0000SA0L2
. . . Table 3 has CPI ex shelter, as well as Core ex shelter https://www.bls.gov/news.release/cpi.t03.htm

Rent (SA) https://data.bls.gov/timeseries/CUSR0000SEHA
Fred: (SA) Rent of Primary Residence in U.S. City Average https://fred.stlouisfed.org/series/CUSR0000SEHA
(NSA) https://fred.stlouisfed.org/series/CUSR0000SEHA

SA = Seasonally Adjusted, NSA = Not Seasonally Adjusted

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Gender: Male
Hometown: Minnesota
Member since: Sat Jan 1, 2005, 03:45 AM
Number of posts: 10,825

About progree

Thanks for all the good wishes. A wellness check was done several days ago My next door neighbor of 43 years is looking out for me

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