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Inflation Mirage: Core Inflation Declines To 1.7% YoY, Real Average Hourly Earnings Decline To 0.7% YoY

This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.

Inflation must seem like a mirage to Janet Yellen and The Federal Reserve. And no, it isn’t an oasis either. The US economy can’t seem to find inflation or wage growth despite near full employment (according to the Federal government, that is).


Now The Balance Begins To Shift

The balance between QE and Treasury supply will begin to shift in July. The underlying bid it has provided for stocks and Treasuries will begin to fade.

This report tells why, and what to look for in the data and the markets.  GO TO THE POST


Core CPI YoY less food and energy fell to 1.7%, but it is still higher than core PCE growth YoY of 1.505% (The Fed’s preferred inflation measure).

coreyoy

CPI for shelter YoY fell to 3.26% in July, still 2x core inflation. And 5x hourly wage growth.

US Real Average Hourly Earnings 1982-1984 USD YoY also declined to 0.7% YoY.

realavghourly

Now, if the Federal government included home prices in their inflation calculation, problem solved! Case-Shiller home prices are growing at a steady 5.7% YoY, considerably higher than wage growth.

csyoyinf

Here is a breakdown of the headline CPI numbers.

cpi contrib_0

And here is a chart explaining why The Fed keeps saying inflation is around the corner, but never seems to get there.

ASmira-r

With emphasis on hot air.

BN-SC304_YELLEN_M_20170214110041

Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

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