Sunday, September 24

Consumer price increases are not the case, so take a closer look at the numbers.

The story was initially featured in the Before the Bell newsletter of CNN Business. If you’re not subscribed, you can sign up here and listen to the audio version by clicking on the link.

CNN –

The Consumer Price Index, which was released on Thursday, showed that US consumer prices increased by 3.2% for the 12 months ending in July, a rise from 3% in June.

The annual inflation rate has increased for the first time in a year this month, but don’t press the panic button yet.

Julia Pollak, the chief economist for ZipRecruiter, emphasized that inflation is not showing any signs of slowing down, as it is gradually decreasing across a diverse range of goods and services.

Economic data is not without its fair share of pitfalls, including the possibility of unpredictable monthly rates and individual components like gas, food, and shelter. However, economists are currently studying the data to understand how it can be broken down.

Joe Brusuelas, the principal and chief economist for RSM US, informed CNN that if prices went up every month, it would result in inflation rising by approximately 2% over the course of a year.

The figures are getting closer to the point where the Federal Reserve wants to track inflation. The US central bank is relying on the core Personal Consumption Expenditures index to achieve its 2% inflation objective. Core PCE experienced a 4.2% annual growth rate in June, as per the Commerce Department’s data.

The CPI on Thursday indicated that the Fed is working towards achieving its goal, but price increases are being slowed. Core CIP, which measures the cost of food and energy without considering seasonality, rose 0.2% for the month, bringing the annual rate to 4.7%, one-step above June’s 4.8%.

Brusuelas stated that in the future, there might be relief in relation to the core inflation estimate, which includes rents, new cars, and used cars.

Shelter, or rent, is still playing a larger role in inflation than other expenses. In July, shelter expenses contributed to 2% monthly growth, accounting for 90% of the increase.

Anna Bahney, my colleague, suggests that the trend may shift in the near future.

San Francisco Fed researchers have predicted a significant decrease in shelter inflation since the global financial crisis of 2007 to 2009.

The researchers forecasted that shelter inflation would experience a significant decline through the end of 2024, with potential negative changes for overall inflation.

The researchers’ models exhibit a broad range of possible changes, with year-over-year shelter inflation in late 2024 estimated at negative 9% to positive 2% in the baseline model. An upper-end increase would still signify lagging inflation.

In July, monthly costs for shelter increased by 0.4% from June and 7.7% from a year earlier. After four months where shelter inflation had been steadily increasing, it was 7.7 per cent in July after falling 4.2% in March.

According to Danielle Wiener-Bronner, food-at-home inflation increased by 0.3% in July due to the rise in beef prices. Where is the beef?

Adjusted for seasonal swings, the price of uncooked beef roasts increased by 6.5% between June and July, while prices for un cooked beef steaks rose by 2.3% and those for ground beef by 1.5%. In all, beef and veal were 2.4% more expensive last month.

The country’s beef supplies have been decreasing, resulting in higher prices. Recent droughts and severe drought conditions have led to the sale of cattle by farmers due to high feed costs and expensive or impractical herds. This year, supply constraints were caused by a surge in sales, particularly of cows from previous breeds like sheep.

The rent in Manhattan has hit an unprecedented high point.

Anna Bahney reports that rents in New York city hit an all-time high in July.

The Big Apple has achieved a new record for rents, with the latest increase being driven by the trend of lower lease prices in other areas of the country.

Manhattan’s median apartment rental cost increased by 6% over the past year and 2.3% over June when rents were at $4,300, according to a report by brokerage firm Douglas Elliman and appraisal and consultant firm Miller Samuel.

New York City’s residential apartment buildings are pictured on July 26, 2022. Photo Credit: Spencer Platt/Getty Images.

All the metrics for rent tracked in the report, including median rent, median rental inclusive of concessions, and average rent (all at $5,588), hit all-time highs.

Jonathan Miller, president and CEO of Miller Samuel, expressed that the current situation is disheartening for many.

Find out more by reading here.

VCs are concerned about the new regulations that will restrict US tech investments in China.

According to Michelle Toh, the Biden administration’s latest restrictions on US technology investments in China may have a significant impact on Chinese startups.

On Wednesday, the Biden administration declared that it would restrict investments from US venture capital and private equity firms, as well as joint ventures in Chinese artificial intelligence, quantum computing, and semiconductors.

Despite the new measures still being in the works, DCM, a venture capital firm from Silicon Valley that manages over $4 billion investments, stated that the decision would alter the structure and presentation of its investments in artificial intelligence.

The officials announcing the restrictions on Wednesday stressed that their aim was to prevent US capital from supporting China’s military rather than harming its economy.

Find out more by reading here.

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