I’d like to point out that a significant portion of the increase in that data point for the last quarter was related to an increase in used car prices.
Inflation and a recession are now here :(
- Thread starter lawpoke87
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True. The inflation would be 3.6% without used car prices. Unfortunately, almost everyone needs a car. Maybe a more important number…real hourly wages dropped 0.5%. Something we would expect to see during rapidly rising inflation.
We do need to see upticks one wages, but at least we aren’t seeing stagflation. A lot of this just has to do with supply chain shortages and demand increases. Also, UAE tanking oil production output increases in OPEC doesn’t help either.
What did we say we would have been at without the used autos ? A bit above 3%? The fact that transport in Europe is much more light-rail centric might have something to do with the escaping effects of transportation related inflationary problems. (Car prices and gas supply / demand)
I’m curious if their metrics are actually weighted similarly to ours in terms of consumer needs per capita?
Also, a number of their countries are behind ours in terms of opening back up due to vaccine availability and the delta variant.
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3.6%.
A little over 80% of households in Europe own area least one car. That number is 91% in the US. There is a difference but not nearly large enough to explain the large difference in inflation rates. Even is you take a huge leap and say used car prices have twice the inflationary effect here compared to Europe we’re still sitting at 4.5%. Over twice that of Europe.
You might look at the last 1.9T stimulus package this spring as a significant factor. No such package was enacted in Europe. There were plenty of economist warning of the inflationary effect of pouring trillions up trillions into the economy and cautioned against going too far. Politicians didn’t listen for obvious reasons. We govern with short term considerations you know.
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I think the second stimulus package was meant to act like a defibrillator to the economy as the vaccinated began to emerge from their hidey holes. So far, that has worked. Inflation is a problem, sure... but it's certainly better than the alternative of not having enough ability for activity like we did after the 2008 crisis when most economists were saying that the government didn't put in enough money. As supply chains improve and the job market begins to even out I would expect inflation to taper slightly (as long as the FED, OPEC, and other unforeseen events don't throw a wrench in things in the interim)
Interestingly, I think I'm going to be negotiating a pay bump for a promotion soon (cross my fingers) and I'm not quite sure how to address the effect of prolonged inflation.
You know , right before the pandemic , my truck was about 10k trade in value according to KBB, took it in the other day just to see how much it was still worth, I was stunned when the first offer they gave me to buy my truck was 15k
The consumer price index rose 0.5% in July, well below the 0.9% pace in June. Core consumer prices, excluding food and energy, rose 0.3% last month, shy of economists' expectations for a 0.4% gain. Year-over-year, the CPI rose 5.4% year-over-year in July, the same as June
I’m not a fan of excluding food and energy as these are large budget items of every American. Perhaps a bigger problem is inflation measured by any of the above metrics is running well above the increase in wages. People continue to get poorer. Something we expect to see in times of rapidly rising inflation.
To be fair I just got a 50%+ raise with a promotion so maybe I care less.
I do understand it’s a problem though lol.
As far as energy goes, I think the increase in things related to gas prices will be somewhat temporary. Saudi et al will open the taps to guarantee the US doesn’t eat into their market share. If they don’t, it will mean their price war was done for no reason.
Congrats on the raise and promotion. If you’re ever in Tulsa lunch is on you 
Sounds good!Congrats on the raise and promotion. If you’re ever in Tulsa lunch is on you
Probably time for the Admin to address. Poor and middle class are rapidly loosing their ability to pay the bills.
www.cnbc.com
Producer inflation accelerated in August, as wholesale prices rose record 8.3% from a year ago
The producer price index for final demand products was expected to increase 0.6% in August, according to economists surveyed by Dow Jones.
Remember when it was asserted on this board that Europe's lack of inflation was due to the smaller size of the Pandemic stimulus dollars they put into their economy? Remember when I said that they were lagging behind the US in what inflation they were seeing? Peppridge Farm Remembers.
www.cnbc.com
It comes after German consumer prices rose by 4.1% in September — the highest level in almost 30 years. The rise has been driven higher by surging energy prices, deepening concern among policymakers. The front-month gas price at the Dutch TTF hub, a European benchmark, has risen almost 400% since the start of the year.
Inflationary pressures all over the world, and not just in America, are happening as a result of a multitude of Covid related factors, one major one being the lack of investment the O&G industries saw during the pandemic due to a combination of prior financial difficulties as well as the major strain that demand disappearance during early Covid had on them. You're starting to see that in fuel costs which is inflating transport costs.
Euro zone inflation hits highest level in 13 years as energy prices soar
Higher inflation data comes as lawmakers fret about soaring energy prices.
It comes after German consumer prices rose by 4.1% in September — the highest level in almost 30 years. The rise has been driven higher by surging energy prices, deepening concern among policymakers. The front-month gas price at the Dutch TTF hub, a European benchmark, has risen almost 400% since the start of the year.
Inflationary pressures all over the world, and not just in America, are happening as a result of a multitude of Covid related factors, one major one being the lack of investment the O&G industries saw during the pandemic due to a combination of prior financial difficulties as well as the major strain that demand disappearance during early Covid had on them. You're starting to see that in fuel costs which is inflating transport costs.
I’m not sure how much of Europe’s spike can be attributed to Covid and not an over reliance on green energy along with being dependent upon Putin for it natural gas supplies. Europe is in a tough spot with winter around the corner. What happens when you cut your ability to generate power with fossil fuels and the wind subsides and water levels drop? What happens when you don’t replenish your natural gas reserves and Russia tells you to pound sound. Not saying Covid hasn’t played a role but as the linked analysis details much of the issue is self inflicted and has zero to do with the pandemic.
www.google.com
This is why European energy prices are breaking records
Vaulting prices signal worsening energy supply shortages just as the winter season starts.
Renewable energy is not driving up demand for natural gas or other fossil fuels, it has driven it down. The problem is that supply is out of whack.I’m not sure how much of Europe’s spike can be attributed to Covid and not an over reliance on green energy along with being dependent upon Putin for it natural gas supplies. Europe is in a tough spot with winter around the corner. What happens when you cut your ability to generate power with fossil fuels and the wind subsides and water levels drop? What happens when you don’t replenish your natural gas reserves and Russia tells you to pound sound. Not saying Covid hasn’t played a role but as the linked analysis details much of the issue is self inflicted and has zero to do with the pandemic.
This is why European energy prices are breaking records
Vaulting prices signal worsening energy supply shortages just as the winter season starts.
They haven’t been able to generate the energy from wind and water they’ve been accustomed too due to weather patterns. You’re correct in that’s it’s a supply issue. One of their problems is when you take fossil fuels offline and green energy along with natural gas supplies dip there are few alternatives. Europe will be in a position of begging Putin for NG in the next 30-60 days imo.
Trust me, lower production from wind / hydro for a couple days or even a month or two doesn’t spike demand like that. We deal with it all the time in the US. NG supply being low is the problem, just like oil supply is a problem here.
Also, energy prices aren’t the only things spiking in Europe in terms of inflation.
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The lack of supply doesn’t appear to be Covid related though as was the premise. Russia is behind this mess and the decrease in green energy is exaporating the problem further. I’ve never understood the policy of decreasing your own ability to supply energy when no reliable replacement supply exists. I don’t consider Putin as reliable btw
. Seems similar to the path many here want to go down except replace Russia with OPEC. 
Russia is pumping a lot less natural gas to Europe all of a sudden — and it is not clear why
Some analysts have suggested Gazprom may be limiting its delivery of natural gas supply to Europe to support its case in starting flows via Nord Stream 2.
So your solution to being held hostage by Russia for carbon commodities is to… install / utilize more carbon burning energy generation units? Seems plausible.
Didn’t say that. I said not to decrease your ability to supply the energy your consumers need until there’s is a reliable energy source to cover demand. Common sense stuff. Being held hostage by Russia or OPEC isn’t going to end well as we’ve seen before and are seeing again. Funny how we don’t pay attention to history.
Being held hostage will be intermittent as production return, more spare capacity is brought online and varied types of renewables and storage are installed.
Europe has permanently removed capacity and production. Both which are now needed and will be needed for the foreseeable future. Europe is a pissed off Putin away from a major catastrophe this winter. Zero need to eliminate your ability to produce enough fossil based energy to meet demand given your reliance on Putin and still limited green energy production. This could get bad over the winter. Hope they don’t mind begging or offering major concessions to prevent its people from freezing.
It takes $$$ to keep coal plants online. There is a reason to not have the spare capacity you’re referring to and the reason is because it’s preventatively expensive.
Drop in the bucket compared to what Europe is now experiencing (and its going to get worse). Electric prices have risen 360% since January. That is not a typo btw. Millions upon millions aren’t going to be able to afford to beat their homes over the next 6 months. This crisis is just beginning and lies solely at the hands of the European leaders who lacked to foresight to ensure they had sufficient energy capacity. Relying on Putin is never a good plan.
Why Europe's energy prices are soaring and could get much worse
A combination of market, geographic, and political factors have coalesced into a perfect storm, threatening to derail the economic recovery and hurt household incomes. #EuropeNews
www.google.com
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It’s it a drop in the bucket. 3X the prices for a certain short period (which might improve as we hit higher wind winter seasons) does not necessarily outweigh the cost of keeping a ton of non- used fossil fuel (coal) plants operational and fund the purchase of their fuel sources.Drop in the bucket compared to what Europe is now experiencing (and its going to get worse). Electric prices have risen 360% since January. That is not a typo btw. Millions upon millions aren’t going to be able to afford to beat their homes over the next 6 months. This crisis is just beginning and lies solely at the hands of the European leaders who lacked to foresight to ensure they had sufficient energy capacity. Relying on Putin is never a good plan.
Why Europe's energy prices are soaring and could get much worse
A combination of market, geographic, and political factors have coalesced into a perfect storm, threatening to derail the economic recovery and hurt household incomes. #EuropeNews
Natural Gas prices have tripled across the globe… the increase in electricity cost reflects that because that is the spare capacity that we’re using.
I show our current NG price at $5.90 while Europe’s is $15.49. Are these numbers accurate ?
I’m not sure what it would cost to keep a few coal plants operational. I do know the current situation will cost Europe billions and billions of dollars and possibly trillions if the spike has a long term effect on their economies. They entrusted their economic stability on Putin. Not sure what they were thinking. You keep sufficient capacity to ensure against this type of situation.
This stuff is starting to hit people hard already. Car parts on back order all over and prices are stupid for just basic things like windshield wipers and batteries
All those “Made in China” or “Made in Vietnam” tags are coming back to bite us in the ass.
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