Wall Street is on edge, placing bets when their crack cocaine, quantitative easing will be removed. The Federal Reserve said they would have to taper quantitative easing if inflation went past their target rate.
The June Consumer Price Index, which measures inflation, was unchanged from May. The reason was gasoline prices, which dropped again, this time -2.0% from last month and up 1.7% for the year. Cheaper gas offset other increases. Below is the graph for CPI's monthly percentage change.
The Producer Price Index, or wholesale inflation, increased 0.1% in June 2012 for finished goods. Energy alone decreased -0.9% with gas actually increasing 1.9%. Core PPI, which is finished goods minus food and energy, increased 0.2% and is the 4th month in a row for an increase. Food alone increased 0.5%. While this is wholesale, retail shoppers beware, price increases are usually passed onto consumers.
The Consumer Price Index for December 2010 increased 0.5% from last month. For the year, the Consumer Price Index for all Urban Consumers (CPI-U) has risen 1.5%. Gas alone increased 8.5% from November. Core CPI, or all items less food and energy, also increased, 0.1%, the same increase as last month. For the year, core CPI, or minus food and energy, is off it's record lows, now at 0.8%.
The Consumer Price Index for November 2010 increased 0.1% from last month. For the year, the Consumer Price Index for all Urban Consumers (CPI-U) has risen 1.1%. Core CPI, or all items less food and energy, also increased, 0.1%, it's first increase in 4 months. For the year, core CPI, or minus food and energy, is off it's record lows, now at 0.8%.
The Producer Price Index, otherwise known as PPI, rose 1.8% on finished goods for November 2009. Graphs below in two different flavors, percent change for the year and aggregate:
Ritholtz quotes from a recent quarterly statement by Hologic, a manufacturer of diagnostic and medical imaging systems and surgical products:
"This year will be challenging for our entire industry, as many drivers of our business remain uncertain," said Jack Cumming, Chairman and Chief Executive Officer. "The severe and rapid economic downturn, result[ed] in a decline in hospital spending ... we witnessed an unprecedented decline in demand for capital equipment at the end of the quarter ... Hospital systems across the country have responded to tightening access to capital by restricting capital expenditures, implementing tight spending controls and reducing personnel." (emphasis added by Ritholtz)
FedEx is the first company to announce that it will cut its workers' wages:
FedEx on Thursday moved to slash employees’ salaries and other benefits in the face of what Fred Smith, chief executive, called “the worst economic conditions in the company’s 35-year operating history”.
The Memphis package delivery company, which has this year shed about $1bn in costs, reiterated that it expected earnings per share of $3.50 to $4.75 this year.
The IEA, which coordinates energy policy in 28 developed countries, will reduce the estimated growth in global demand for a third month in a report tomorrow, according to four former IEA analysts. Energy prices also dropped because of declining equity markets and a rising U.S. dollar.
``It all comes back to the economy and how deep folks think the recession will be,'' said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. ``Demand is poor and should get worse as the recession deepens.
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