Economy | timiacono.com - Part 30

The Labor Department reported that overall consumer prices in the U.S. rose by 0.2 percent from June to July and that the official annual rate of inflation now stands at 2.0 percent, up from just 1.1 percent as recently as three months ago.

Rising costs for both energy products and housing were primarily responsible for the upward trend, however, year-over-year price comparisons will soon see downward pressure as big monthly increases from last August and September (as indicated below) will roll out of the calculation in the months ahead.

July Consumer Prices

A full one percentage point of the current 2.0 percent inflation rate came last summer when prices rose 0.5 percent in August and again in September, so, absent a similar surge this year, the inflation rate will go down when August prices are reported next month.

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Santelli vs. Liesman on Inflation

In advance of today’s latest government data on inflation (or the lack thereof), CNBC personalities Steve Liesman and Rick Santelli tangle over rising prices and Federal Reserve policy. It begins at about the one minute mark and heats up about a minute later.

I’m not sure about the government’s measure of inflation, particularly as it relates to the so-called “cost of living adjustments” the elderly receive for social security, but I am sure of one thing – these guys really hate each other, or at least they act that way.

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Job Growth and Pay in Recent Years

This chart from a Wall Street Journal story and ones similar to it have been making the rounds in recent weeks and for good reason – while job creation has been more than enough to keep up with population growth, the pay for the jobs being created kind of sucks.

Some think it’s not a big deal since this is not too different than past recoveries, however, as noted here a week or so ago, it’s not a good thing when retail trade and food service account for almost twice as many new jobs as their share of the workforce.

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Slow Auto Sales Hold Back June Retail Sales

The Commerce Department reported(.pdf) that U.S. retail sales were lower than expected in June, up 0.2 percent after an upwardly revised gain of 0.6 percent in May (note that this data series is adjusted for seasonal variations but not for inflation or population growth).

Slow automobile sales were the primary reason for the overall weakness, down 1.0 percent after jumping 2.9 percent the month prior, as retail sales ex-autos rose 0.5 percent. Other gains were broad-based with only four of the 13 major categories showing sales declines in June and, on a year-over-year basis, overall retail sales were 5.4 percent higher, down from an annual gain of 5.9 percent in the previous report.

June Retail Sales

Due to rising pump prices, gasoline station sales jumped 0.9 percent in June following a gain of 0.6 percent in May. Excluding both autos and gasoline, overall sales rose 0.4 percent after no change the month prior.

Sporting goods, clothing, and grocery sales all rose about one percent for the month while housing related categories showed a surprising decline, given the booming housing market in the spring. Sales at furniture stores fell 1.4 percent, home improvement store sales fell 0.4 percent, and electronic and appliance store sales fell 0.1 percent, however, the former two groups saw big sales increases the month before that help to explain the recent decline.

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