Rocket Fuel Newsletter – 08/13/22
Last week’s candy-tasting position not sweet enough for you? How about a literal dream job – Casper will pay you to sleep!
This week’s edition includes an inflation update and how consumers are feeling about buying that brand new boat.
Fuel Up 🚀
Inflation Trends Pointing In The Right Direction
Two major inflationary metrics were released this week by the Bureau of Labor Statistics (BLS) for the month of July: the consumer price index (CPI) and the producer price index (PPI). Both measures showed positive trends for the economy.
Consumer Price Index
Though the CPI came in at 8.5% year-over-year, it was a welcome deceleration from last month’s 9.1% reading. Energy prices, namely oil/gasoline, have been on a downward trend since gasoline prices hit their peak in June, and they had the biggest influence on this week’s report.
Removing energy and food, inflation was at 5.9%, which is in line with June’s report.
Producer Price Index
The producer price index, which measures wholesale inflation, decreased by 0.5% month-over-month, beating the expectation by 0.7 percentage points. Again, energy prices were the primary driver, as the cost to acquire goods like oil has decreased over time.
Overall, these two indicators suggest that prices should start to come down to more normal levels over time. The Fed may also be influenced by these encouraging numbers that 1) their rate hikes have worked to slow inflation, and 2) more drastic rate hikes may not be necessary.
Consumers power around 70% of U.S. total output each year, so keeping an eye on how they feel about spending their hard-earned greenbacks has become a science.
Following last month’s lowest consumer sentiment survey on record, yesterday’s report from the University of Michigan showed a rebound.
Even as sentiment and future expectations have soured, the spending has not faltered as consumers are making up for lost time (vacations and dinners out on the town).
So, while pundits and click bait machines keep shouting “Recession,” it is no guarantee that this will hit all areas.
We will see in next week’s updated release of Retail Sales!
John F once again topped the charts! His time of 31 seconds last week was one second ahead of Ali’s time. Six solvers finished last week’s puzzle in less than a minute – great job!
This week’s puzzle gets 2 Rockets out of 5.