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Inflation Slows in July, Deflating Thune’s Partisan Alarmism

Senator John Thune keeps crying about inflation. Today’s inflation report may dry those tears—inflation slowed in July, signaling price increases have peaked:

U.S. consumer prices increases slowed in July even as they remained at a 13-year high on an annual basis, but there were tentative signs inflation has peaked as supply-chain disruptions work their way through the economy.

The consumer price index increased 0.5% last month after climbing 0.9% in June, the Labor Department said on Wednesday. In the 12 months through July, the CPI advanced 5.4%. The drop in the month-to-month inflation rate was the largest in 15 months.

Excluding the volatile food and energy components, the CPI rose 0.3% after increasing 0.9% in June. That was the smallest gain in 4 months and the first deceleration in the so-called core CPI since February.

The core CPI rose 4.3% on a year-on-year basis after advancing 4.5% in June. Annual inflation rates have been lifted by the fading out of last spring’s weak readings from the CPI calculation but those so-called base effects are leveling off [Lindsay Dunsmuir, “U.S. Consumer Price Increases Slow in July, Signs Inflation Peaked,” Reuters, 2021.08.11].

Prices have been going up not because Democrats enact policy but because everyone, socialists and capitalists alike, is out shopping faster than the supply chain can respond:

“We believe June marked the peak in the annual rate of inflation,” said Kathy Bostjancic, an economist at Oxford Economics. “That said, price increases stemming from the reopening of the economy and ongoing supply chain bottlenecks will keep the rate of inflation elevated” [Christopher Rugaber, “U.S. Consumer Prices Rose in July But at Slower Pace,” AP via PBS NewsHour, 2021.08.11].

Wall Street investors are taking the down-bending inflation curve as a sign that Fed Chairman Jerome Powell has been right to treat the current inflation as transitory:

…”Inflation looks to be as ‘transitory’ as the FOMC have been telling us that it will be … and inflationary forces should continue to ease from here on for the remainder of the year,” said Michael Brown, senior analyst at Caxton, London [Devik Jain and Ambar Warrick, “Wall St Set to Rise as Inflation Growth Slows,” Reuters, 2021.08.11].

…and rather than baling at the new spending Senator Thune has been fighting, investors are digging passage of the big infrastructure dig:

The blue-chip Dow (.DJI) and the benchmark S&P 500 (.SPX) logged record closing highs on Tuesday, as economically sensitive stocks gained with the U.S. Senate’s passage of a $1 trillion bipartisan infrastructure package.

…Equipment manufacturers Caterpillar Inc (CAT.N) and Deere & Co (DE.N), construction materials supplier Vulcan Materials Co (VMC.N) and steelmaker Nucor Corp (NUE.N) rose between 0.5% and 2.9% in premarket trading, adding to sharp gains in the previous session on hopes of reaping gains from infrastructure projects [Jain and Warrick, 2021.08.11].

Poor John just can’t get the economy right. But, like Kristi Noem, John Thune gets elected for looks, not comprehension.

30 Comments

  1. sx123 2021-08-11

    There must be inflation or economic math is wrong.
    When bacon is back down to $2.59/pound I’ll believe the transitory inflation hype.
    But at $8/pound, Thune is right.
    Your wages are not increasing fast enough to keep up.

    All the free money through stimmy checks and huge govt stimulus must increase inflation. More money flying around, more people spending it and supply shortages all contribute. There _must_ be inflation.

  2. John Dale 2021-08-11

    I measure inflation based on the level of potato chips in the bag.

  3. jerry 2021-08-11

    sx123, Time to stop eating bacon then if you can’t afford it. Many many people could not afford it when it cost 2.59 a pound. John Dale will show you how to shop. Anyone that counts potato chips in the bag, knows how to find a bargain. You too should get together and compare notes and practices.

    Advice from me would be to you would be go shoot a feral hog, scald it, shave it and smoke it. It’s a trifecta! You get to shoot that bear killer you keep in the closet, get some good exercise and then you get to pick at it when it’s done and on the table. Be careful though, those hogs don’t play. You and John Dale can figure the total cost per pound and per pick. Fun for the two of you!

  4. sx123 2021-08-11

    John makes a good point. Another way companies hide inflation is by shrinking package sizes and/or quantities. Sneaky.

  5. John Dale 2021-08-11

    “Inflation has completely wiped out America’s pay raises.” — Julio Gonzales, juliogonzales.com

  6. John Dale 2021-08-11

    All this talk of bacon gives me a great idea for lunch! :D

    We seem to be in a period of stagflation, which is being offset with chip portion management. I also noticed that the size of the packaging of Fig Newtons. But I’ll be darned if the wafer sizes didn’t also decrease! Can you confirm?

    https://en.wikipedia.org/wiki/Stagflation

  7. John Dale 2021-08-11

    “packaging of Fig Newtons decreased”

  8. jerry 2021-08-11

    sx123 and your buddy, John Dale. Hey, I know. Count the beans in a pound of pinto beans. Do this daily for 10 days also, from 1 pound packages from several stores both local and regional. Then get back to us with the count in each of the 1 pound packages to see if they really are 1 pound packages and how many beans were in each one. Have some 8 buck a pound bacon sandwiches while you count.

    Suggestion to John Dale, buy Pringles, they are stacked and much easier to count.

    Do the packages of Fig Newtons reflect that decrease in weight? If so, then the packaging may be less in weight but maybe, just maybe the Fig Newtons are the same size. Suggestion, buy fruit as it’s better for the teeth.

  9. Mark Anderson 2021-08-11

    Jeez John, I’ve read how you eat soooo healthy and now the facts come out, chips and fig newtons.

  10. John Dale 2021-08-11

    Dear Jerry;

    Math, logic, algorithms.

    Sincerely,

    The Universe

  11. John Dale 2021-08-11

    Listen, folks. If it gets out that last night I ate some Oreo ice cream .. I’m ruined.

    I’m entrusting you with this information in hopes that you won’t spread it around.

    Sincerely,

    John

  12. mike from iowa 2021-08-11

    You can buy 2 pounds of fig bars for $2.98 at Walmart, which is cheaper than a package of over priced name brand fig bars.

  13. John Dale 2021-08-11

    Dear get thee behind me mike from iowa;

    It’s not exactly calculus .. but .. what is the price per unit of weight indexed from store to store?

    Same store, different time (say 2019 and now both at Wal Mart)?

    I feel like you know this, but you’re coming up from under the bridge to blow your nose.

    John

  14. cibvet 2021-08-11

    The only major inflation I see on this blog is the self-conceit of a couple of dolts who seem to relish having their ignorance displayed for all to see. For them, recognizing their foolishness could possibility lead to educating themselves.

  15. mike from iowa 2021-08-11

    I know you know this, Johnny Rabbit Hole refugee. I don’t play your games. Because you are full of caca del toro of a nasty magat kind. Billy Goats Gruff keep you trolls under the bridge. How easily you forget history.

  16. Guy 2021-08-11

    Cory, you’re correct to keep most of your focus on: JOHN THUNE. Thune, NOT Rounds, is up for reelection next year. Let’s not get sidetracked by Mike Rounds who was just reelected for another 6 years.

  17. jerry 2021-08-11

    Pothole Thune and this whooper from his weekly news fibs

    “The meatpacking industry is highly concentrated – with only four companies controlling more than 80 percent of the U.S. beef processing capacity. That means that our cattle producers have very little power to negotiate a fair price for their cattle. I have a bill that would help reduce producers’ reliance on the major meatpackers by providing resources to establish and expand small meat processing capacity.”

    You would think the boy would support COOL then as his words imply. And pray tell Pothole John how you would direct ranchers to this oasis of butcher shops that will buy their herds. I smell EB5

  18. Mark Anderson 2021-08-11

    Jerry that’s why for a moment he seemed independent of the trumpies. He helped get the bill going and then wrote that he really would have voted against it. Thune is really worried about a trumpie. You know everyone in So Dak land should be pushing Kristi to lower her sights and go for Thune. It would be easy in trumpland. It would be fun to watch.

  19. Mark Anderson 2021-08-11

    Just imagine a Kristi rally at Mt. Rushmore with trump leading the way. Even better both on motorcycles at Sturgis next year. They could both speak before a Ted Nugent concert at the Full Throttle. First the senate and then VP, a match that would make America grate.

  20. Mark Anderson 2021-08-11

    You know John, Julia Child died almost 17 years ago. Plus she too tall for me, but she did love the French, fries for everyone. They are still called French Fries and not Freedom Fries. The pubs can’t do anything right, correct I mean.

  21. grudznick 2021-08-11

    Mr. Dale,

    grudznick can reassure you Mr. mike is not Satan. I know Satan. Satan is a friend of mine. And he’s not from Iowa.

  22. Mark Anderson 2021-08-11

    Grudz, please allow me to introduce myself… LMK I j

  23. oldtimerDON 2021-08-11

    John Thune will always have second job if he loses an election. Perfect weather vane. He has to be Trumpee to keep up with Noem, but his real base are more normal conservatives (is there such a thing any more, though?) . What is professional politician to do?

  24. Richard Schriever 2021-08-11

    “But, like Kristi Noem, John Thune gets elected for looks, not comprehension.” Anorexic bags of bones – both.

  25. John Dale 2021-08-11

    Thune whipped votes against election integrity investigation.

    He is most certainly not a Trump supporter.

    Is he on board with the America first agenda, though?

  26. M 2021-08-12

    I thought you ate real healthy John Dale. Bacon, ice cream and potato chips?

    You obviously had too much to eat last night, caused a tad bit of indigestion.

  27. V 2021-08-12

    I’ll never eat another fig newton.

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