The latest seasonally adjusted inflation rate for July came in nearly flat at -0.03%. This was on the heels of a blisteringly hot June number of 1.35%.
While inflation did surprise to the downside, it had been expected to be much lower due to the fall in oil and drop in gasoline prices. The YoY number also fell as the reading from last July of 0.46% fell off the calendar.
As expected, the Consumer Price index cooled a bit thanks to falling gasoline prices. The question is will this give the Federal Reserve the excuse it needs bow out of the inflation fight?
The Consumer Price Index for July was up 8.5% year-on-year. That was down from June’s 9.1% print and slightly below the 8.7% expectation. Of course, an 8.5% increase in prices over the course of a year is still extremely hot.
The Federal Reserve is all-in on the inflation fight.
Or is it?
While everybody focuses on interest rate cuts, the promised Fed balance sheet reduction isn’t going quite as promised.
We get a lot of Orwellian spin out of Washington D.C. A recession isn’t a recession, Putin’s price hikes caused inflation, and now we’re told a massive spending bill will cure inflation.
Last weekend, the Senate gave final approval to the so-called “Inflation Reduction Act.” Despite the catchy title, it is nothing but a tax-and-spend bill. The pundit class insists this will not only cool inflation but will also lower the budget deficit. This is a pipe dream. As Ron Paul explains, the bill will not only increase inflation, it will also increase government spending and taxes.
Consumers continue to add to their record level of debt as higher prices squeeze wallets.
Americans added another $40.1 billion to the debt load in June, according to the latest data from the Federal Reserve. That represents a 10.5% year-on-year increase.
The July non-farm payroll report came out much stronger than anticipated. According to the Bureau of Labor Statistics, the economy added 528,000 jobs and the unemployment rate ticked down to 3.5%. The narrative was that this blockbuster employment report proves that we’re not in a recession.
In his podcast, Peter Schiff broke down the data and reveals the truth behind the “strong job market” hype.
Despite White House and media spin downplaying a recession, a lot of people aren’t buying. Fifty-seven percent of small business owners say a recession has already begun. Peter Schiff talked with Laura Ingraham about government spending, taxation, inflation, household debt and the recession. He said the recession is already worse than people think.
The Treasury increased the total debt by $27B in June. Activity slowed in the latest month across all instruments, but particularly the conversion of short-term to long-term. After massive moves to extend debt maturity and shrink short-term debt by $530B over 4 months (shown below by the large negative turquoise bars), July went very quiet.
According to the BLS, the economy added 528k jobs in July, blasting past analyst estimates of 250k. The strong report comes on the heels of a Fed meeting last week that made a point to state they are hyper-focused on the job market as a sign of a weakening economy. The White House and Fed are now in lock step ignoring negative GDP growth and hanging their hat on the job market. For now, that message fits their narrative.
Jobs are on everybody’s mind as the July employment report comes out. Will the labor market show more cracks? Or will it give the pundits more room to spin the idea that we’re not really in a recession? In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the labor market and breaks the July jobs data news as it comes out. He also talks about the “health” of the American consumer and gold’s flirtation with $1,800 an ounce.
