Written by Michael Thervil
When it comes to inflation numbers, today is the day that the new inflation figures were published. According to the Bureau of Labor Statistics the new inflation figures are 3.48% which is a 0.4% increase from 3.15% last month with an inflation rate of 4.98% to the same date last year (2023). Also worthy of note, it was reported that since 2012, the U.S. Federal Reserve has been seeking a core inflation rate of 2%. That goal of 2% inflation appears to be nothing more than a pipe dream. The question is why?
It is out position at VEDA Magazine, that because of U.S. Government perpetually engaging in endless deficit spending, fighting multiple wars, lacking any real manufacturing base, combined with the national debt increasing to over a minimum of 1 trillion dollars roughly every 100 days, the idea of the U.S. Government acquiring a 2% interest rate will never occur. In fact, a more fitting interest rate goal within reach for the U.S. Government would be an inflation rate of roughly 3%.
When we drill down on the numbers on the Bureau of Labor Statistics website, Americans are eating out way more than they are cooking at home. Could it be that eating out has become cheaper than purchasing groceries? If you look at what foods Americans are buying, things such as Meats, Poultry, Fish, and Eggs are up. Coming in second is Fruits and Vegetables, with the number one spot going to Non-alcoholic Beverages and Beverage Materials. Cereal And Baking Products and Dairy and Related Products are down by a wide margin.
In terms of Energy Commodities and Energy Services, there lies a very large margin between the two with energy services surging 3.1% to 0.9% respectively. In the category of Energy Commodities, fuel oil is down –3.7% and gasoline of all types is up 1.3%. Energy Services which consist of electricity and natural gas (piped) came in at 5.0% (electricity) and -3.2% (natural gas) respectively. In the “All Items Less Food and Energy” sector, Commodities Less Food and Energy Commodities fell down 0.7%.
At the bottom of this category were apparel, new vehicles, and used cars and trucks. On the rise were Medical Care Commodities, Alcoholic Beverages and Tobacco and Smoking Products. The winner of this section surprisingly was Tobacco and Smoking Products. the services less Energy Services were up 5.4%. Within this sector, all elements were up with Shelter (5.7%), Medical Care and Services (2.1%) and Transportation (10.7%).
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