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JULY 2022 INFLATION READINGS :
The HIGHEST category throughout this last month was almost completely isolated to ENERGY, with an overall increase of 7.5% month over month. This includes a whopping 10.4% increase in the cost of energy commodities, and an 11.2% increase in the cost gasoline. The other type of utility gas was also up by 8.2%…leading, of course, to that headline number increasing SO MUCH higher than expected.
https://www.bls.gov/news.release/cpi.nr0.htm
On top of that, food also increased by another 1% this month, while new and used vehicles increased by another 0.7% and 1% respectively.
Finally, rental costs increased by 0.8%, which was the largest monthly increase since April of 1986….and, medical care rose by 1.9% in dental services, which was the largest monthly change EVER recorded.
Now, the good news is that, when you EXCLUDE food and energy prices…Core Inflation STILL came in high, at 5.9%, BUT, it’s at the same pace as the month prior - suggesting that - maybe - inflation is beginning to peak?
After all…so far, in the month of July…oil prices have fallen below $100 per barrel…car repos are beginning to add slightly more inventory on to the market…and, commodities are falling on fears of a recession. That, in turn - should soon cause CORE CPI numbers to fall, assuming there isn’t another black swan event that we can’t predict…and, at the end of the day: Energy prices are being skewed by overseas tension…which, the Federal Reserve will have very little of an effect on.
The truth is, inflation numbers like these are a SLIGHTLY lagging indicator…and, even though we can CERTAINLY see that prices are going UP…July’s data is going to be a LOT more telling now that people are cutting back, and some sectors are beginning to soften.
HOWEVER…let's be real: if you own stocks, and you intend to hold them for the next few decades…then, why would it matter if the prices drop further? You should see this as: There’s a Black Friday sale, I’m going to continue buying as I would, normally - and now, I happen to get a good deal. If prices then drop even further, same thing…I’ll continue buying.
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