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   Brian Wesbury
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  Fed Set to Announce Taper in November
Posted Under: Employment • Government • Inflation • Markets • Research Reports • Fed Reserve • Interest Rates • Spending • Bonds • Stocks

No changes to monetary policy today, but plenty of changes to the outlook for monetary policy in the next few years.

Based on language the Federal Reserve added to its statement as well as comments by Fed Chief Jerome Powell at the post-meeting press conference, the Fed is very likely to announce a "tapering" of quantitative easing at the next meeting in early November.  The only thing that could stop this is if the economy takes an unexpected turn for the worse.  Always possible, not likely.

The key sentence added to the statement was that "[i]f progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted."  Then, at the press conference, Powell twice said that the hurdle of "substantial further progress" toward the Fed's goals before taping begins has been "all but met."  He also noted that the Fed was only looking for a "decent" employment report between now and then, nothing spectacular. 

In addition, Powell made it clear at the press conference that tapering is likely to end by mid-2022 and we shouldn't expect any rate hikes until tapering is done. 

In terms of rate hikes, there were some significant changes to the "dot plots," which anonymously set out Fed policymakers' projections for short-term interest rates over the next few years.  Like in June, no one expects a rate hike this year.  However, for 2022, the Fed is now evenly split, with nine policymakers projecting zero rate hikes while nine forecast at least one hike.
It's important to recognize, however, that the composition of the Fed is likely to change by early next year even if Fed Chief Jerome Powell is re-appointed.  For example, Fed Vice Chair Richard Clarida, who was appointed by President Trump, is very likely to be replaced. The same goes for Fed Regulatory Chief Randy Quarles.  In theory, Quarles could remain a regular Fed governor even after his term as regulatory chief finishes in October, but that's unlikely.  So that would give President Biden a chance to appoint at least two more dovish new members to the Fed, tilting those dots back toward zero rate hikes in 2022. 

Meanwhile, with tapering likely to continue until mid-2022, that would leave only four months or so before the mid-term election.  We don't think the Fed will raise rates during that period. 
The dot plots also got more aggressive about 2023, with the median short-term target at 1.0% for the end of 2023 (versus a prior estimate of 0.625%).  For 2024, the median policymaker anticipates ending the year with a short-term target of 1.75%. 

Oddly, the more aggressive projections for the path of short-term rates were not accompanied by more aggressive economic forecast.  The most significant change to the economic forecast was a downgrade for real GDP growth this year (5.9% versus a prior estimate of 7.0%) with slightly faster growth in 2022-23.  Meanwhile, the Fed raised the inflation forecast for this year (4.2% versus a prior estimate of 3.4%), but with almost no change to inflation forecasts for 2022-23.

The bottom line is that barring some unexpected turn of events, the Fed is very likely to announce a tapering to QE in early November and start implementing that tapering soon thereafter.  For rate hikes, we're thinking very late 2022 (after the mid-term elections) at the earliest.  The problem with all this is that there is no reason QE should still be in effect; tapering should have started, and ended, a long time ago.  In addition, the Fed's forecast on inflation is clearly too low.  And with the Fed not raising interest rates anytime soon, inflation is likely to turn out much more persistent than the Fed hopes. 

Brian S. Wesbury – Chief Economist
Robert Stein – Deputy Chief Economist

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Posted on Wednesday, September 22, 2021 @ 5:04 PM • Post Link Share: 
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  Existing Home Sales Declined 2.0% in August
Posted Under: Data Watch • Home Sales • Housing • COVID-19

Implications: Existing home sales declined in August following two months of gains, nearly matching consensus expectations.  Since the pandemic hit US shores in early 2020, sales of existing homes have been through a wild ride, as the nearby chart shows. Now it looks like sales may be stabilizing around a six million annual rate (about 5% above pre-pandemic levels) despite buyers' ongoing struggle with high prices and lack of supply.  Speaking of supply, there was some bad news on inventories buried in today's report.  A strong pace of new home construction and widely available vaccines likely made more sellers feel comfortable listing their homes for five months in a row through July.  However, it looks like the recent surge in the Delta variant disrupted this trend in August with inventories falling 1.5%.  Our expectation is that this is probably a temporary disruption and listings will soon move upward again, at least on a seasonally adjusted basis, as virus fears once again fade.  Meanwhile, the months' supply of existing homes for sale (how long it would take to sell today's inventory at the current sales pace) was unchanged at 2.6 in August, remaining near record lows.  Despite the ongoing shortage of listings, there is still significant pent-up demand from the pandemic, with buyer urgency so strong in August that 87% of the existing homes sold were on the market for less than a month.  The combination of strong demand and sparse supply has pushed median prices up 14.9% in the past year, but the good news is that price gains have been decelerating since hitting a year-to-year gain of 23.6% in May.  As more inventory becomes available and price gains continue to moderate, we expect sales in 2021 to ultimately post the best year since 2006.  Why?  First, a trend toward work-from-home is likely to remain in place even as pandemic-related measures ease.  That means people who were previously tied to specific locations, typically in urban areas, will have more flexibility, making more space in the suburbs an attractive proposition. Finally, Millennials are now the largest living generation in the US and have begun to enter the housing market in force, making up over 50% of new mortgage issuance for the first time in 2019. This represents a demographic tailwind for sales not only in 2021, but for the foreseeable future.

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Posted on Wednesday, September 22, 2021 @ 2:34 PM • Post Link Share: 
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  China Worries Unwarranted
Posted Under: Markets • Research Reports • Bonds • Stocks
Prior to today, the S&P 500 index was down four days in a row, and many market observers are blaming China, specifically the recent news about Evergrande, a major Chinese real estate company that looks to be heading to default on its loans. While many will credit last night's Chinese liquidity additions as saving the day, we were never that worried about Evergrande. We want to address this, but before we do, let's take a step back for a second and talk about why China is where it is today.

Chinese GDP has grown around 9% a year for the last 25 years.  Impressive to say the least and something no other country in the world that we know of has been able to achieve.  But how do you grow a country by 9% a year for 25 years?  Measures of output like GDP really come down to two major factors: growth in the labor force (hours worked) and growth in productivity (output per hour). On both fronts the Chinese have been blessed in recent decades.

The best prescription for unprecedented productivity gains is simple.

1.  Do nothing for thousands of years.
2.  Then borrow everyone else's technology.

It's not due to communism, in fact it's the exact opposite!  China's rapid growth was only possible because Deng Xiaoping decided in 1982 to move China to more of an open, market-based economy. Because of that decision, hundreds of millions of Chinese have been brought out of poverty.  Was it a truly free market?  Not even close.  But it was a massive change and it allowed China to adopt the world's technology, resulting in massive productivity gains.

Think of China over the last thirty years as a Ford Model T with a rocket engine strapped to its back. It's been great as it has continued to move forward in a straight line, with the rocket of capitalism speeding the country forward.  But because of this, the Communist Party's power has been weakened over the decades.  It now looks like President Xi Jinping is responding forcefully, trying to reverse the trend and move back to a more centrally controlled economy to regain lost power to the detriment of the people.  And when you try to make a leftward turn in a Ford Model T with a rocket engine strapped to its back it's not pretty.  The Model T eventually hits a wall and blows up into thousands of pieces.  This is what China is in the early stages of as President Xi tries to move power back to the state.

The examples of President Xi bullying private companies into serving the Communist Party's agenda are everywhere. Earlier this year they halted the Ant Financial IPO, which would have been the world's largest.  He's gone after China's tech sector, where lots of the money and power lie, launching many probes, slapping on heavy fines, and blocking mergers.  The top six Chinese tech stocks have lost $1.1 trillion in value in the past six months.  And it doesn't stop there, the $120 billion private tutoring sector was wiped out with a single administrative order. No one knows where the regulation will stop.  Political risk there is infinite.  Influential billionaires routinely disappear.

We've always thought the idea of China supplanting the US on the world stage was reminiscent of elite US opinion about Japan in the 1980s.  Back then Japan was the big new thing much like China is today.  It was going to beat the US.  You couldn't go to a good business school and not read book after book about what the Japanese were doing.  And that brings us to demographics and China's labor force.

Japan's stock market famously peaked in 1989.  Less well known is that is roughly when their working age population peaked as well.  Japan has still not come back, and their working age population is still on the decline.

According to the United Nations, China's working age population is currently hitting its peak as well and is set to decline by over 40% by 2100.  The Communist Party is directly to blame; it's the inevitable effect of their centrally planned one-child policy. What China needs is to move further towards free-market capitalism, not reverse course.  Communism has never worked and never will.

But instead of recognizing this, the Communist Party has doubled down and moved on to Chinese real estate as President Xi tries to crack down on visible wealth inequality with what is called a policy of "common prosperity."  Over the past decades Chinese real estate has boomed as the Communist Party has mostly barred access to global financial markets to its people. Real estate was an asset most normal people were able to buy that felt safe and reliable. In fact, owning property in China denotes a higher status in society.

As the Chinese saved hand over fist, money continued to pump into real estate leading to ever-rising prices, causing many areas to be over-built and leading to LOTS of mal-investment. In fact, about 70% of household wealth is tied up in real estate. Much of this over-building and funneling of money into real estate was a direct result of poor centrally planned policies, with the most notorious example being the "ghost cities" without a soul living in them.

Now with more avenues for investment and a shrinking population in the future both hurting demand for real estate, this bubble seems to have burst. Other private real estate companies, besides Evergrande, may default or go under. But will that bring contagion to the US?  We don't believe so.

Banks in the US have very little exposure to Chinese real-estate. There may be some hedge funds that do, but no large banks.  A default has been considered a dirty word ever since the mortgage crisis in 2008, but that was due to mark-to-market accounting which turned a fire into an inferno.  Companies were forced to mark assets to illiquid market prices, which, in turn, made them look insolvent on paper, even if the underlying mortgages were still paying on time. We do not have mark-to-market accounting in place in the US today.

Nor will an economic slowdown in China harm the US in any significant way.  S&P 500 revenues coming from the greater China area, which includes Hong Kong and Taiwan, accounted for only about 2% of revenues in 2019.  Remember, US growth accelerated in the 1990s when Japan started stagnating and back then Japan bought a larger share of our GDP than China does today.

The idea that China is the driving force behind the recent market drop ignores all kinds of other issues. Serious immigration problems, the potential for politicians to pass $4.5 trillion in new spending and big tax hikes, a desire to move toward socialism in the US, inflation, a potentially tightening Fed, the Delta variant, the debt ceiling, or the fact it's been so long since the last correction could also be spooking the market.  The bottom line is that China is not anywhere near the largest of our worries.

Brian S. Wesbury – Chief Economist
Robert Stein, CFA – Deputy Chief Economist 

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Posted on Wednesday, September 22, 2021 @ 2:22 PM • Post Link Share: 
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  Housing Starts Increased 3.9% in August
Posted Under: Data Watch • Home Starts • Housing • Inflation • COVID-19

Implications: Housing starts surprised to the upside in August, but the details in the report were not quite as strong.  All of the gain in August was due to the volatile multi-family sector, where new construction rose 20.6%.  Meanwhile, construction of single-family homes fell 2.8%, the second decline in a row.  While it's too early to know for sure, there are signs developers may be shifting resources away from single-family home construction and toward larger apartment buildings in response to rapidly rising rents as some people move back into big cities and the eviction moratorium ends. Zillow estimates that rental costs are up 7.4% in the past year and Apartmentlist.com estimates they have risen an even faster 12.0%, easily exceeding typical gains in the 3-4% range.  Notably, starts in the Northeast, which is home to many large cities, rose 167.2% in August, the largest monthly gain on record since 1959, primarily driven by the multi-family sector.  Home building has been volatile so far in 2021 due to widespread supply-chain issues and shortages of labor, but looking at the 12-month moving average, which helps sift through that volatility, shows residential construction now stands at the fastest pace since 2007.  While the monthly pace of activity will ebb and flow as the recovery continues, we expect housing starts to remain in an upward trend.  A big reason for our confidence is that builders have a huge number of permitted projects sitting in the pipeline waiting to be started.  In fact, the backlog of projects that have been authorized but not yet started is currently the highest since the series began back in 1999.  Despite this, builders increased permits for new construction for the second month in a row, signaling an expectation that demand will remain strong in the future.  Moreover, all the gain in permits came from the multi-family sector, as well, which rose 15.8% in August and now sits at the highest levels since 1990.  Keep in mind, the US needs roughly 1.5 million housing starts per year based on population growth and scrappage (voluntary knockdowns, natural disasters, etc.).  However, we haven't built that many new homes in any calendar year since 2006.  With plenty of future building activity in the pipeline and builders looking to boost the inventory of homes and meet consumer demand, as more Millennials finally enter the housing market, it looks likely construction in 2021 will cross the 1.5 million unit benchmark this year and then move higher in 2022.  This positive outlook is reinforced by yesterday's NAHB index, a gauge of homebuilder sentiment, which rose to 76 in August from 75 in July.  This marks the first gain in five months, with the increase largely driven by lower costs for inputs.

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Posted on Tuesday, September 21, 2021 @ 11:27 AM • Post Link Share: 
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  Resist Inflation Complacency
Posted Under: CPI • Data Watch • GDP • Government • Inflation • Markets • Monday Morning Outlook • Fed Reserve • Spending • Bonds • Stocks • COVID-19

Some analysts and investors breathed a big sigh of relief on inflation when it was reported last week that the Consumer Price Index rose 0.3% in August versus a consensus expected 0.4%.  But we think any sense of relief is premature.

First, in no way, shape, or form, is a 0.3% increase in consumer prices indicative of low inflation.  Consumer prices rose at a 3.3% annual rate in August, which is still well above the Federal Reserve's 2.0% target.  Yes, we are well aware that the official Fed inflation target is for the change in the PCE deflator, which always runs a little lower than the increase in the CPI, but it doesn't run anywhere close to 1.3 points lower, which is what it'd have to do for the Fed to hit the long-run 2.0% inflation target.

Second, a number of sectors had price declines in August that should not persist.  For example, airline fares fell 9.1% in August and are now 17.4% below the average fares of 2019, which was pre-COVID.  So, as COVID gradually recedes these prices should rise.
Third, housing rents are likely to accelerate sharply in the years ahead, including for both actual tenants as well as owners' equivalent rent, which is the rental value of homes occupied by homeowners.  With the eviction moratorium in place, rents have grown unusually slowly for the past eighteen months.  But, going back to the 1980s, rents tend to lag the Case-Shiller home price index by about two years.  Now, with the national eviction moratorium finished, look for rents to make up for lost time.  And because rents make up more than 30% of the overall CPI, anyone predicting lower inflation numbers in the future are saying other prices will fall.

Ultimately, however, it's important to recognize that inflation is still a monetary phenomenon and the M2 measure of the money supply is up about 33% since February 2020, pre-COVID.  Eventually, that will translate into a substantial rise in overall spending or nominal GDP (real GDP growth plus inflation) and since the Fed has little to no control over real GDP growth beyond the short-term, that means higher inflation. 
One way to think about it is that between the late 1950s and early 1990s, the ratio of nominal GDP to M2 hovered in a narrow range very close to 1.8.  What that means is that every new dollar of M2 translated into 1.8 more dollars of spending.  And if the ratio remains the same, then a 10% increase in M2 leads to a 10% increase in overall (nominal) spending.

This ratio rose in the 1990s.  Interestingly, so did real GDP growth.  So, the strong real growth of the 1990s was actually associated with lower inflation.  Since then, the ratio of GDP to M2 has generally dropped.  Immediately prior to COVID, in the last quarter of 2019, the ratio was 1.42; now it's 1.12.  What this has meant is that M2 growth has not translated directly to inflation.

However, let's assume the ratio is headed back to the 1.42 that prevailed just before COVID.  If nominal GDP normally grows 4% per year – 2% real GDP growth plus 2% inflation – it would take six years (so, 2027) to get back to that 1.42 ratio.  But that's only if M2 doesn't grow in the interim.  No change at all.  More likely, M2 does grow in the interim and that additional growth feeds through directly to higher inflation.
Another way to think about it is that the ratio of nominal GDP to M2 has dropped because the velocity of money has fallen.  That's the speed with which money circulates through the economy.  It's hard to see velocity falling further from 1.12 because to do so means eventually going below 1, and that has not happened in any recorded history of the US.
The Fed meets this week and will be issuing its usual statement after the meeting.  We don't anticipate any significant changes to monetary policy at this meeting, although we do expect a hint that the Fed will announce a tapering of quantitative easing to begin after the next meeting in early November.
However, the Fed will also be releasing a new set of economic projections as well as projections about the path of short-term interest rates.  Back in June, the Fed was forecasting that inflation would be back down to roughly 2.0% in 2022.  If they make a similar forecast this week, it will be a sign that it isn't taking upward inflation risk nearly as seriously as it should.

Brian S. Wesbury – Chief Economist
Robert Stein, CFA – Deputy Chief Economist 

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Posted on Monday, September 20, 2021 @ 12:01 PM • Post Link Share: 
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  COVID-19 Tracker 9/16/2021
Posted Under: COVID-19

We have received a significant number of requests to continue publishing the COVID-19 tracker. With the Delta variant on everyone's mind as cases rise again, we are hearing more about school closings, mask mandates, potential shutdowns, vaccine mandates, vaccine effectiveness, the list goes on and on. The vaccines have clearly led to a lower overall level of deaths during this recent wave of Delta variant cases, and that represents considerable progress. There are still many questions out there, and it's important to follow the data closely.

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Posted on Thursday, September 16, 2021 @ 4:25 PM • Post Link Share: 
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  Recovery Tracker 9/16/2021
Posted Under: Bullish • COVID-19

The table and charts in the Recovery Tracker track high frequency data, which are published either weekly or daily. With most states reopening their economies and widespread distribution of COVID-19 vaccines, these indicators show continued improvement in economic activity. It won't improve in a straight line, but the trend should remain positive over the coming months and quarters. The charts in the Recovery Tracker highlight where the high frequency data indicators were in 2019, 2020, and in 2021.

Click here for this week's Recovery Tracker
Posted on Thursday, September 16, 2021 @ 4:04 PM • Post Link Share: 
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  Retail Sales Rose 0.7% in August
Posted Under: Data Watch • Employment • Government • Retail Sales • Fed Reserve • Interest Rates • Spending • COVID-19

Implications: Retail sales rebounded in August, surprising the consensus, increasing 0.7% for the month.  Ten of thirteen major categories rose in August, with non-store retailers (internet and mail-order) leading the way, followed by general merchandise stores as back-to-school shopping was in full effect. The weakest category by far was autos as supply chain issues continue to wreak havoc on that sector. In fact, retail sales excluding autos rose 1.8% in August, the largest gain in five months. Overall sales are up a robust 15.1% from a year ago.  Another way to look at it is that sales are up 17.7% versus February 2020, which was pre-COVID.  "Core" sales, which exclude the most volatile categories of autos, building materials, and gas station sales, rose 2.1% in August, are up 15.0% from a year ago, and up 18.2% versus February 2020.  In other words, due to temporary government support, retail sales are running hotter than they would have in the absence of COVID, even as the level of output (real GDP) is still running lower than it would have been in the absence of COVID.  It has not been an even recovery for all major categories, though.  For instance, non-store retailers (+34.7%) and sporting goods stores (+33.2%) have grown significantly faster than overall retail sales since February 2020.  The last category of sales to get above February 2020 levels was restaurants & bars, which finally moved into the green in April and are now up 8.7% from 18 months ago.  Looking ahead, given that overall retail sales are still far above the pre-COVID trend, we expect a modest trend decline in the year ahead.  However, as long as policymakers don't completely panic because of the Delta variant, we also expect sales at restaurants & bars to buck that trend and move higher, along with sales of services not counted by the retail trade report, as America gets back toward normal.  In the months ahead, the path of retail sales will be a battle between a number of opposing factors.  Rising wages, jobs, and inflation will all be tailwinds for retail sales, while the waning of the temporary and artificial boost from "stimulus" checks along with the end to overly excessive jobless benefits will be headwinds. In other news today, initial jobless claims rose 20,000 last week to 332,000.  Meanwhile continuing claims declined 187,000 to a new recovery low of 2.665 million.  With the end of additional unemployment benefits nationally earlier this month, all eyes will be on the jobs recovery as we move into the final quarter of 2021. Also today, on the manufacturing front, the Philadelphia Fed Index, a measure of factory sentiment in that region, rose to a very robust 30.7 in September from 19.4 in August, signaling solid growth in that region for the month.

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Posted on Thursday, September 16, 2021 @ 11:51 AM • Post Link Share: 
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  Industrial Production Increased 0.4% in August
Posted Under: Autos • Data Watch • Inflation • COVID-19

Implications:  Industrial production rose less than expected in August, largely the result of the late in the month plant shutdowns related to Hurricane Ida. In fact, the Federal Reserve estimates that without the storm-related headwinds, the overall index would have risen 0.7% for the month. Looking at the details, the disruptions were concentrated in manufacturing (petrochemicals, plastic resins, refining operations) and mining (oil and gas extraction) industries that have a large presence in the Gulf of Mexico. It's not a surprise then that mining was the weakest major category in August, falling 0.6%, its first decline in four months. Meanwhile, manufacturing output managed to eke out a gain of 0.2% despite the disruptions. The gain was driven by continued growth in auto production which rose 0.1% in August after a huge 9.5% gain in July.  Outside the auto sector, manufacturing rose 0.2% in August. Finally, utilities output rose 3.2% in August as unseasonably warm weather boosted demand for air conditioning.  Notably, the 0.4% gain in the headline index was enough to finally push that measure above its pre-pandemic high.  That said, it's important to keep in mind that despite hitting an important milestone, production still has a way to go to meet current demand. Ongoing issues with supply chains and labor shortages are hampering a more robust rise in activity, with job openings in the manufacturing sector currently at a record high and more than double pre-pandemic levels. We expect more temporary disruptions from Ida in September but a return to the upward trend in overall industrial production in the months after. It looks like the worst of Delta concerns are beginning to subside and labor disincentives are dissipating as well with the end of pandemic related unemployment payments. In other factory related news this morning, the Empire State Index, a measure of New York factory sentiment, soared to +34.3 in September from +18.3 in August. Finally, we also got trade inflation data this morning.  Import prices fell 0.3% in August while export prices increased 0.4%.  In the past year, import prices are up 9.0%, while export prices are up 16.8%.

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Posted on Wednesday, September 15, 2021 @ 12:49 PM • Post Link Share: 
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  The Consumer Price Index (CPI) Increased 0.3% in August
Posted Under: CPI • Data Watch • Government • Housing • Inflation • Fed Reserve • COVID-19

Implications:  Consumer prices continued to increase in August but at the slowest pace since January, climbing 0.3% for the month.  However, even with that slower increase, consumer prices are up 5.3% versus a year ago, well above the Federal Reserve's 2.0% long-term target.  Although some analysts may think the August data is a "win" for the "transitory" camp, overall consumer prices were still up at a 3.3% annual rate in August, which is also well above the Fed's inflation target.  Energy led the overall 0.3% price gain, rising 2.0% for the month, with food prices rising 0.4%.  "Core" prices, which exclude food and energy, rose 0.1% in August.  These prices were held down by an unusually wide array of price declines, including airfares (-9.1%), used cars and trucks  (-1.5%), motor vehicle insurance (-2.8%), and hotels/motels (-3.3%).  Combined, those four factors reduced both the headline gain in the CPI as well as core CPI growth by 0.2 percentage points.  Yes, used car and truck prices may continue to decline in the months ahead after a large run-up in the past year, but airfares, and motor vehicle insurance remain below the pre-COVID trend.  In the months ahead, we anticipate a faster pace of core inflation.  Housing rents (both from actual tenants as well as the imputed rent of owner-occupants) make up almost 40% of the core CPI, have been accelerating lately, and should accelerate more due to the end of the national moratorium on tenant evictions.  Moreover, with the national Case-Shiller home price index up 18.6% in the last year, some would-be homeowners may shift toward renting, putting further upward pressure on rents.  Notably, new vehicle prices rose 1.2% in August and are up 7.6% versus a year ago, the largest increase since 1980 and a result of a  continued shortage in semi-conductor chips.  The hope that supply chain issues would fade after a few months has proven wrong, as recent delta-driven shutdowns in Asian country factories and ports have only made matters worse. And although used car and trucks prices declined in August, the twelve-month increase for that category remains an extremely elevated 31.9%.  One way to assess the underlying trend is to measure price gains since February 2020, the last month pre-COVID, which would naturally include the price declines early-on in the shutdowns.  Since then, consumer prices are up at a 3.6% annual rate while core prices are up 3.1% annualized.  As the massive increase in the M2 measure of the money supply continues to gain traction, we think the ranks of those claiming the recent burst in inflation is transitory will dwindle.  The Federal Reserve and many others assume inflation will be close to 2.0% next year.  They are in for a rude awakening.

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Posted on Tuesday, September 14, 2021 @ 12:28 PM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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