July 16th, 2022 | Inflation, Producer Price Index (PPI), Recession, Housing Market, Mortgage Rates, Business Ethics, Job Retention, Employers, Retail Sales & Food Prices

<p>Inflation Another month, another extremely high inflation rate. The CPI came in today for the month of June at 9.1% which topped the estimate of 8.8% and was the highest level since November 1981. Energy inflation was top of mind yet again as gasoline prices climbed close to 60% compared to one year ago, electricity prices grew 13.7% over the same time frame, and natural gas was up 38.4%. Food prices also remained hot as they rose 10.4% over the last 12 months and the shelter index was up 5.6% which was the highest level since February 1991. One area that is seeing a "reprieve" from what I believe is more difficult comparisons is car prices. The cost for new vehicles was up 11.4% compared to last year and the used car & truck index was up 7.1% during the same time frame. Remember recently this was around 30%! With that said I still believe inflation will be lighter as we exit the year, but all lighter means is not as high! We have started to see some reduction in commodity prices which could help with input costs for companies and could slow the CPI in the months ahead. Remember it takes time for these various costs to work through supply chains and the overall economy. Producer Price Index (PPI) After yesterday's CPI report, the Producer Price Index (PPI) remained around historic levels. In the month of June, Headline PPI was up 1.1% compared to the month of May and increased 11.3% compared to last year (Recent all-time high was 11.6% in March). Of the month over month gain almost 90% came from a 10% increase in final demand energy. One positive note was the core PPI which excludes energy, as well as food and trade service prices was up 6.4% compared to last year. This was a deceleration from May's 6.8% gain and off the 7.1% gain we saw in March. Unfortunately, with these elevated prices, the higher costs will likely continue to be passed on to the end consumer. Recession There may be a recession coming but it will be the best recession we may have seen in our lifetime. There's not enough room in this post