Just to show you how seriously you should take the “experts” these days, Wall Street and the like seem to be aflutter with the good news that just came out.
Inflation clocked in at a measly 8.5 percent in July!
Wait, 8.5 percent?
How low have our expectations become that an inflation print of 8.5 percent is considered good news?
When you take the time to understand that last July we were also in an inflationary environment, and this July saw an 8.5 percent increase over that, suddenly it becomes obvious:
8.5 percent inflation on top of previously high inflation is really bad.
Going from 9.1 percent inflation year-over-year in June to 8.5 percent in July is like watching your favorite basketball team lose a game by 30 points one night, then lose by 28 points the next night.
They still stink.
Digging into the CPI numbers tells an even worse story.
The price decreases came almost exclusively from a decrease in fuel costs that many of us have noticed in recent weeks.
But that’s about all.
While this break in fuel prices is very nice and welcome, it still only amounts to decreasing the really, really ridiculously high costs down to just really ridiculously high costs.
Let me know when this turns into a real trend and we can go from welcoming the little bit of relief to actually celebrating.
With that said, many people can (and likely have) cut back on driving already to save on fuel costs. One thing people cannot cut back on is food.
We all continue to need to eat.
On that front, food prices increased at en even greater rate in July than they did in June.
Will this normalize in the coming weeks? Will lower fuel costs help decrease food prices as well?
Perhaps, but we don’t know for sure.
What we do know is that food prices increased by 1.1 percent in July over the prices in June, which had increased by 1 percent over the prices in May.
Food prices increased 10.9 percent year-over-year, which includes a whopping 13.1 percent increase in the cost of food eaten at home.
That means the food you buy at the grocery store is supposedly over 13 percent higher today than it was a year ago, which was considerably higher than the year before that.
So, is an 8.5 percent increase better than 9.1 percent?
On paper, yes.
Are prices on the goods we all need still skyrocketing like nobody’s business?
Absolutely yes.
So let’s leave the corks in the champagne bottles for just a little while longer until we see some real, sustained improvements, not just in gasoline prices.
Reference: https://www.bls.gov/news.release/cpi.nr0.htm